The White House’s Office of Management and Budget (OMB) is telling agencies to plan for a 2 percent Federal civilian agency pay raise in fiscal year (FY) 2025.

In its new Circular A-11 budget preparation guidance, OMB said the 2 percent pay raise is a “provisional estimate,” and agencies should anticipate revising the pay raise amount once the president makes a final decision as part of the White House’s FY2025 budget request.

“Your OMB representative will provide additional guidance during budget season,” the guidance says. “The pay guidance above will apply to the statutory pay systems (General Schedule, Foreign Service, and Veterans Health Administration), the Executive Schedule, the Senior Executive Service (SES), and wage grade employees.”

“You should be prepared to provide supporting detail on calculating pay costs, including separate identification of the wage base reflected in the submission,” it adds. “For compensation costs, you must explicitly justify any increases in average compensation for the budget year.”

OMB and Federal agencies will begin negotiating the FY2025 budget request in the fall.

President Biden proposed a 5.2 percent pay raise for Federal employees in his budget plan for FY2024, which begins in October. If enacted, the increase would total the largest annual pay raise for Feds in 43 years.

The average pay increase of 5.2 percent for civilian and military personnel would come in as the largest since 1980, when the Carter administration issued a 9.1 percent average pay increase.

That pay increase seems likely as both the House and Senate versions of the FY2024 National Defense Authorization Act (NDAA) include a 5.2 percent pay raise for service members.

For 2023, Congress approved a 4.6 percent pay increase for Federal employees.

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Grace Dille
Grace Dille
Grace Dille is MeriTalk's Assistant Managing Editor covering the intersection of government and technology.