Examples of January 2006 Pay Computations

Below are examples showing how various categories of employees will be affected by the January 2006 pay adjustments. Annual rates are shown. The annual rate providing the highest entitlement (shown in bold font) is used to calculate the employee's hourly rate in biweekly pay computations. An hourly rate is computed by dividing the annual rate by 2,087 and rounding the result to the nearest cent. (Note: Firefighters compensated under 5 U.S.C. 5545b are subject to special pay computation rules, including the use of an hourly rate computed using a 2,756-hour divisor. See 5 CFR part 550, subpart M.)

1. General Schedule (GS) employee.

Grade/step: GS-9, step 5
Location: Rest of U.S. locality pay area

2005 GS Rate: $42,374
2005 locality rate: $47,340 ($42,374 x 1.1172)
2006 GS rate: $43,267 (after 2.1% across-the-board increase)
2006 locality rate: $48,684 ($43,267 x 1.1252)

2. GS employee promoted on same day the 2006 pay adjustments take
effect. (STANDARD METHOD)

Grade/step: GS-0201-11, step 5, promoted to GS-0201-12
Location of both positions: Rest of U.S. locality pay area
Reference: 5 CFR 531.207 and 531.214(d)(3)

Step 1: Apply the across-the-board pay adjustment to the GS-11, step 5, rate.

2005 GS rate: $51,271
2005 locality rate: $57,280 ($51,271 x 1.1172)
2006 GS rate: $52,349 (after 2.1% across-the-board increase)
2006 locality rate $58,903 ($52,349 x 1.1252)

Step 2: Process the promotion to GS-12 using the standard method, since the employee is covered by the same pay schedules before and after promotion.

Step A: No geographic conversion.

Step B: Increase GS (base) rate by two within-grade increases to GS-11, step 7 ($55,429).

Step C: The payable (highest) rate of basic pay for GS-11, step 7, is 2006-RUS at $62,369.

Step D: The highest applicable rate range for the employee's position of record after promotion is the GS-12 locality rate range in the 2006-RUS locality rate schedule. The lowest step rate in that range that equals or exceeds the GS-11, step 7, RUS locality rate is 2006-RUS, GS-12, step 2, at $64,367.

2006 GS rate: $57,205
2006 locality rate: $64,367

3. GS employee promoted on same day the 2006 pay adjustments take effect from a non-special rate position to a special rate position. (ALTERNATE METHOD)

Grade/step: GS-0201-11, step 5, promoted to GS-0180-12
Location of both positions: Rest of U.S. locality pay area
GS-12 position covered by special rate schedule 0506
Reference: 5 CFR 531.207 and 531.214(d)(4)

Step 1: Apply the across-the-board pay adjustment to the GS-11, step 5, rate.

2005 GS rate: $51,271
2005 locality rate: $57,280 ($51,271 x 1.1172)

2006 GS rate: $52,349 (after 2.1% across-the-board increase)
2006 locality rate: $58,903 ($52,349 x 1.1252)

Step 2: Process the promotion to GS-12 using the alternate method, since different pay schedules apply before and after promotion and the alternate method produces a higher payable rate upon promotion than the standard method.

Step A: No geographic conversion.

Step B: Increase GS rate by two within-grade increases to GS-11, step 7 ($55,429).

Step C: The payable (highest) rate of basic pay for GS-11, step 7, is 2006-RUS at $62,369.

Step D: If the employee were promoted to a GS-12 position in the 0201 occupational series (non-special rate), the highest applicable rate range for that GS-12 position after promotion would be the GS-12 RUS locality rate range. The GS-12, step 2, locality rate ($64,367) is the lowest step rate in that range that equals or exceeds the GS-11, step 7, RUS locality rate.

Step E: Convert the GS-12, step 2, locality rate to the higher GS-12, step 2, special rate that applies to the employee's position after promotion on special rate table 0506. This GS-12, step 2, special rate is the payable rate of basic pay upon promotion ($68,275).

Step F: The standard method would have compared the GS-11, step 7, locality rate ($62,369) directly to the higher GS-12 special rate range and produced a rate of GS-12, step 1 ($66,430). Since the rate produced by the alternate method (GS-12, step 2) is greater than the rate produced by the standard method, the result of the alternate method is used.

2006 GS rate: $57,205 GS-12, step 2
2006 locality rate: $64,367 ($57,205 x 1.1252)
2006 special rate: $68,275 ($57,205 + $11,070 special rate supplement)

4. GM employee.

(See example 8 for computing the 2006 pay adjustment for a GM employee receiving a special rate.)

Grade/step: GM-13, step 00 ($78,182--not on step) (See 5 CFR 531.244(a)(1) for a GM employee whose rate of basic pay equals a regular GS step rate.)
Location: Washington, DC, locality pay area
Reference: 5 CFR 531.244 and 531.245

Step 1: Subtract the GS-13, step 1, GS rate from the GM employee's GS rate in 2005. (Use the 2005 GS rates.)

2005 GM employee's GS rate: $78,182 (GM employee's GS rate)
2005 GS rate: $64,478 (GS-13, step 1)
Difference: $13,704 ($78,182 - $64,478)

Step 2: Subtract the GS-13, step 1, GS rate from the GS-13, step 10, GS rate. (Use the 2005 GS rates.)

2005 GS rate: $83,819 (GS-13, step 10)
2005 GS rate: $64,478 (GS-13, step 1)
Difference: $19,341 ($83,819 - $64,478)

Step 3: Divide the result of step 1 by the result of step 2. Carry the results to the seventh decimal place and truncate.

$13,704 / $19,341 = 0.7085466

Step 4: Subtract the GS-13, step 1, GS rate from the GS-13, step 10, GS rate. (Use the 2006-GS rates.)

2006 GS rate: $85,578 (GS-13, step 10)
2006 GS rate: $65,832 (GS-13, step 1)
Difference: $19,746 ($85,578 - $65,832)

Step 5: Multiply the result in step 3 by the result in step 4.

0.7085466 x $19,746 = $13,990.961

Step 6: Add the result in step 5 to the GS-13, step 1, GS rate (2006) and round to the next whole dollar.

$13,990.961 + $65,832 = $79,823

2006 GM employee's GS rate: $79,823 (after applying 2.1% increase by following the above steps under 5 CFR 531.244)
2006 GM locality rate: $93,792 ($79,823 x 1.1750 (2006-DCB))

5. GS-11 employee receiving a retained rate of pay.

Grade/step: GS-11, step 00: $66,746 (above locality rate range)
Location: Rest of U.S. locality pay area
Reference: 5 CFR 536.305(a) (See 5 CFR 536.305(b) for cases where a retained rate falls below the range maximum after applying the pay adjustment.)

2006 retained rate: $67,678
[$66,746 + $932, where $932 is one-half the dollar increase in the GS-11, step 10, RUS locality rate from 2005 to 2006 (($67,567 - $65,704)/2 = $932))]

6. Special rate employee where locality rate exceeds special rate for the first time in January 2006.

Grade/step: GS-3, step 6
Location: Washington, DC
Special Rate Schedule: Table 0029 (DC Clerical)
References: 5 CFR 530.303(d)

2005 GS rate: $22,922
2005 locality rate: $26,585 ($22,922 x 1.1598)
2005 special rate: $26,852 ($22,922 + $3,930 special rate supplement)

2006 GS rate: $23,405 (after 2.1% across the board increase)
2006 locality rate: $27,501 ($23,405 x 1.1750) (Note: The 2006 special rate for GS-3, step 6, would have been $27,419--$23,405 GS rate + $4,014 special rate supplement. Since the special rate is lower than the corresponding locality rate, the special rate is not used for any purpose.)

7. Special rate employee where special rate continues to exceed locality rate in January 2006.

Grade/step: GS-3, step 1
Location: Washington, DC
Special Rate Schedule: Table 0029 (DC Clerical)

2005 GS rate: $19,647
2005 locality rate: $22,787 ($19,647 x 1.1598)
2005 special rate: $23,577 ($19,647 + $3,390 special rate supplement)

2006 GS rate: $20,060 (after 2.1% across-the-board increase)
2006 locality rate: $23,571 ($20,060 x 1.1750)
2006 special rate: $24,074 ($20,060 + $4,014 special rate supplement)

8. Special rate for GM employee.

Grade/step: GM-13, step 00 ($78,182--not on step) (See 5 CFR 531.244(a)(1) for a GM employee whose rate of basic pay equals a regular GS step rate.)
Location: Washington, DC, locality pay area
Special Rate Schedule: Table 0576
Reference: 5 CFR 531.244 and 531.245

Step 1: Calculate GM-13 employee's 2006 GS rate (see example 4): $79,823.

Step 2: Add percentage supplement included on special rate table. (The supplement is 21% for special rate table 0576 at GS-13.)

2006 GS rate: $79,823 (2006 GS rate from example 3)
2006 locality rate: $93,792 ($79,823 x 1.1750 (2006-DCB))
2006 special rate: $96,586 ($79,823 x 1.21 (table 0576))