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 31.53%. See Salary Table 2022-DCB.)
- Hourly Rate.
Divide annual rate of basic pay by 2,087 hours.
GS-9, step 1 = $ 61,947.
$ 61,947 / 2,087 hours = $ 29.68.
- Biweekly Rate.
Multiply hourly rate of basic pay by 80 hours.
$ 29.68 x 80 hours = $ 2,374.40.
- Title 5 Overtime Hourly Rate
- 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.
$ 29.68 x 1.5 = $ 44.52.
- 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 = $ 68,217.
$ 68,217 / 2,087 hours = $ 32.69.
$ 32.69 x 1.5 = $ 49.04.
GS-14, step 1 = $ 126,233.
$ 126,233 / 2,087 hours = $ 60.49.
In this example, the employee’s hourly rate of basic pay ($60.49) is greater than the GS-10, step 1, hourly rate of basic pay multiplied by 1.5 ($49.04). Therefore, the employee’s title 5 overtime hourly rate is equal to his or her hourly rate of basic pay.
- Night Pay.
Multiply hourly rate of basic pay by 10%. (5 CFR 550.121)
GS-9, step 1 = $ 61,947.
$ 61,947 / 2,087 hours = $ 29.68.
$ 29.68 x 0.10 = $ 2.97.
- Sunday Premium Pay.
Multiply hourly rate of basic pay by 25%. (5 CFR 550.171)
$ 29.68 x 0.25 = $ 7.42.
- Holiday Premium Pay.
Multiply hourly rate of basic pay by number of nonovertime hours worked on holiday (not to exceed 8 hours or the number of nonovertime hours of a compressed work schedule). (5 CFR 550.131 and 5 CFR 610.407)
$ 29.68 x 8 hours = $ 237.44
