How to Compute Rates of Pay

Fact Sheet: How to Compute Rates of Pay

Background

Hourly and biweekly rates for General Schedule employees are computed under 5 U.S.C. 5504. Premium pay is computed under 5 U.S.C. chapter 55, subchapter V, and 5 CFR part 550, subpart A. The rates are computed based on an employee’s annual rate of basic pay, including any applicable special rate supplement or locality payment. (Note: Overtime pay for nonexempt employees is computed under the Fair Labor Standards Act, subject to some special rules for Federal employees. See 5 CFR part 551. In addition, firefighters covered by 5 U.S.C. 5545b are subject to special rules for computing hourly rates and overtime pay. See 5 CFR part 550, subpart M.)

Rules for Rounding

Rates must be rounded to the nearest cent, counting one-half cent and over as the next higher cent (e.g., round $18.845 to $18.85).

Procedure

Follow the rules below to compute rates of pay. (Note: The examples below are based on annual rates that have been increased by a locality pay percentage of 33.26%. See Salary Table 2024-DCB.)

1. Hourly Rate.

   Divide annual rate of basic pay by 2,087 hours.
   GS-9, step 1 = $68,405.
   $ 68,405 / 2,087 hours = $ 32.78.

2. Biweekly Rate.

   Multiply hourly rate of basic pay by 80 hours.
   $32.78 x 80 hours = $2,622.40.

3. Title 5 Overtime Hourly Rate
   1. if employee's rate of basic pay is less than rate of basic pay for GS-10, step 1

      Multiply hourly rate of basic pay by 1.5.
      $32.78 x 1.5 = $49.17.

   2. if employee's rate of basic pay is more than rate of basic pay for GS-10, step 1

      Use the greater of (1) the GS-10, step 1, hourly rate of basic pay multiplied by 1.5 or (2) the employee’s hourly rate of basic pay. (5 CFR 550.113)

      GS-10, step 1 = $75,329.
      $75,329 / 2,087 hours = $36.09.
      $36.09 x 1.5 = $54.14.
      
      GS-14, step 1 = $139,395.
      $139,395 / 2,087 hours = $66.79.

      In this example, the employee’s hourly rate of basic pay ($66.79) is greater than the GS-10, step 1, hourly rate of basic pay multiplied by 1.5 ($54.14). Therefore, the employee’s title 5 overtime hourly rate is equal to their hourly rate of basic pay.

4. Night Pay.

   Multiply hourly rate of basic pay by 10%. (5 CFR 550.121)
   
   GS-9, step 1 = $68,405.
   $68,405 / 2,087 hours = $32.78.
   $32.78 x 0.10 = $3.28.

5. Sunday Premium Pay.

   Multiply hourly rate of basic pay by 25%. (5 CFR 550.171)
   $32.78 x 0.25 = $8.20.

6. Holiday Premium Pay.

   Multiply hourly rate of basic pay by number of non-overtime hours worked on holiday (not to exceed 8 hours or the number of non-overtime hours of a compressed work schedule). (5 CFR 550.131 and 5 CFR 610.407)
   
   $32.78 x 8 hours = $262.24.