FERS Contribution Rates in 2026: What Changes in October, and Whether Your Paycheck or Pension Moves

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Standard FERS employee contribution rates are not changing in 2026. Agency contribution rates are, effective the first pay period on or after October 1, 2026.
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If you're enrolled in FERS, the Federal Employees Retirement System, the percentage withheld from your paycheck for your basic pension in 2026 matches 2025: 0.8%, 3.1%, or 4.4% for most regular employees, depending on your coverage category. What changes in October 2026 is the rate your agency pays into the retirement fund on your behalf. That's a behind-the-scenes accounting figure. It does not increase your paycheck deduction or change your pension.
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This guide from Federal Employee Advisor Network, a retirement planning firm specializing in federal employee benefits, explains both the October 2026 agency change and the separate 2025 proposal to raise employee rates that never became law.
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If you searched for a specific October 2026 FERS change, here's the short version. That change applies to agency contribution rates, not to the standard employee percentages withheld from most workers' paychecks. Both topics appear below so you can see exactly which one affects you.
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What Is Actually Changing in October 2026?
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The October 2026 change applies to agency contribution rates, not employee rates. OPM Benefits Administration Letter 26-307, issued in June 2026, sets revised FERS normal cost percentages that take effect at the beginning of the first pay period commencing on or after October 1, 2026.
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Those revised figures affect the contribution rates that employing agencies pay for FERS, FERS-RAE (Revised Annuity Employees), and FERS-FRAE (Further Revised Annuity Employees) workers.

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The regular FERS agency contribution rate moves from 18.4% to 17.9%. The regular FERS-RAE and FERS-FRAE agency rates move from 16.5% to 15.9%. OPM recalculates these "normal cost" percentages periodically based on actuarial assumptions, then applies the revised figures at the start of the federal fiscal year.

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These rates fund the government's share of your pension. None of this appears on your Leave and Earnings Statement as a change to what you pay.
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Current FERS Employee Contribution Rates in 2026
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Most regular FERS employees contribute 0.8%, 3.1%, or 4.4% of basic pay in 2026, depending on their coverage category. These employee rates did not change on January 1, 2026, and no change to the standard employee rates is scheduled for October 2026.

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OPM and Congressional Research Service materials break the tiers down by entry date. Most regular employees who entered FERS before January 2013 contribute 0.8%. Those who entered during 2013 contribute 3.1% (FERS-RAE). Those hired in 2014 or later contribute 4.4% (FERS-FRAE).

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Special-category employees may have different, higher rates. Qualifying law enforcement officers, firefighters, air traffic controllers, and certain related groups generally contribute at higher rates such as 1.3%, 3.6%, or 4.9%. If you fall into one of these categories, confirm your specific rate with your agency HR office.

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Your FERS coverage category generally depends on when you first entered FERS. For some rehired employees, it also depends on prior creditable service, since certain rehires with less than five years of qualifying prior service fall under the later tiers.

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Your retirement coverage code appears in block 30 of your SF-50. "K" indicates regular original FERS (0.8%), "KR" indicates regular FERS-RAE (3.1%), and "KF" indicates regular FERS-FRAE (4.4%). Special-category retirement codes differ.

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Coverage isn't always determined by your most recent hire date alone. Confirm your code with your agency rather than assuming.

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The 2025 Proposal to Raise Employee Rates, and Why It Failed

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A separate 2025 proposal would have raised employee contribution rates. It never became law.

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In early 2025, the House Committee on Oversight and Government Reform advanced a reconciliation proposal, Section 90001 of its committee print, that would have raised required FERS contributions for many employees hired before 2014. The affected regular-employee rates would eventually have reached 4.4% of pay. Law enforcement officers and related enhanced-retirement groups were exempt, and employees already paying 4.4% were not raised by the provision.

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The Congressional Research Service (In Focus IF12996) laid out the timeline. That committee proposal would have increased contributions for those first hired before 2013 from 0.8% to 4.4% over two calendar years beginning January 2026, reaching 2.6% in 2026 and 4.4% in 2027. Employees first hired in 2013 would have moved from 3.1% to 3.75% in 2026 and then 4.4% in 2027.

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That timeline is the origin of most "FERS employee rates are going up" headlines.

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The proposal was removed before the House ever voted on the bill. According to the Congressional Research Service (In Focus IF13020), the employee contribution increase and a related High-5 pension-calculation change appeared in the House Oversight committee print but were not included in H.R. 1, the One Big Beautiful Bill Act, as passed by the House.
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FedWeek reported that Republican leaders deleted both provisions before the House floor vote to win over moderate members who objected to changing the rules mid-career. The bill then passed the House on May 22, 2025.
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Senate consideration altered or removed additional federal workforce provisions later. The final law, signed July 4, 2025, did not increase standard FERS employee contribution rates or replace the High-3 pension formula with a High-5.

The National Active and Retired Federal Employees Association (NARFE) noted that the enacted governmental-affairs provisions were limited to FEHB (Federal Employees Health Benefits Program) eligibility verification and audit measures. The proposed employee rate increase never took effect at any stage.

Employee Rates vs. Agency Rates: What Actually Changed

The table below separates the three things people confuse. Unchanged employee rates. The October 2026 agency-rate change that is real. And the 2025 employee-rate proposal that failed.

Only the middle column reflects an actual 2026 change, and it does not touch your paycheck.
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Sources: Employee rates and agency-rate changes per OPM Benefits Administration Letter 26-307. Failed-proposal column per Congressional Research Service In Focus IF12996; that proposal was removed before House passage of H.R. 1 (CRS In Focus IF13020). Special-category rates differ from the regular rates shown.

Will Your Paycheck Change in 2026?

Your FERS pension deduction won't change your paycheck in 2026. The employee rate is unchanged, and the October agency-rate change is paid by your agency, not you.

Other payroll factors can still change your take-home pay in 2026, depending on your situation. Federal pay adjustments, locality pay, step increases, promotions, FEHB premiums, tax withholding, Social Security taxes, FEGLI deductions, and changes to your TSP contribution election all affect what lands in your account. None of these represents an increase in the standard FERS employee contribution rate.

Here are the tax and savings figures that apply in 2026. The Social Security Administration's 2026 fact sheet sets the Social Security (OASDI) tax at 6.2% of pay up to a wage base of $184,500, with Medicare at 1.45% of all earnings, plus an additional 0.9% Medicare tax on higher earnings.

The Internal Revenue Service sets the 2026 elective deferral limit for Thrift Savings Plan (TSP) contributions at $24,500. The catch-up is $8,000 for those age 50 and older, with an enhanced $11,250 catch-up for participants who turn 60 through 63 during the year under the SECURE 2.0 Act.

A higher TSP contribution limit only affects your paycheck if you change your contribution election or are contributing up to the maximum.

Will Your Pension Change in 2026?

Your FERS pension is not affected by the October 2026 agency change or the failed 2025 proposal.

OPM calculates the FERS basic annuity using your High-3, the highest average basic pay you earn during any three consecutive years of creditable service, multiplied by your years of service and your accrual rate. Basic pay includes amounts on which retirement deductions are taken but generally excludes overtime and bonuses.

For most regular, non-disability FERS retirements, the standard accrual rate is 1% of your High-3 per year of service. It increases to 1.1% per year when you retire at age 62 or older with at least 20 years of service. Special-category and other retirement computations may differ.

The 2025 proposal to replace the High-3 with a High-5 average could have produced a lower average-pay figure for employees whose basic pay rose steadily over their careers. It was removed before House passage and did not become law. The High-3 remains the governing formula in 2026.

Agency contributions fund the government's share rather than your benefit amount, so the October rate change does not alter your pension either.

Who Would Have Been Affected, and What to Watch Next

Had the 2025 employee-rate proposal passed, it would have hit longer-tenured employees hardest. Original FERS employees paying 0.8% faced the steepest jump.

Consider an employee earning about $101,000 in FERS-covered basic pay. A 0.8% deduction is roughly $31 per biweekly pay period. A 4.4% deduction is roughly $171 before rounding and payroll-specific differences, for an identical pension.

Similar employee-contribution proposals could return in future budget or retirement legislation. Federal Employee Advisor Network, a retirement planning firm specializing in federal employee benefits, recommends verifying any proposed change against enacted legislation and current OPM guidance before making retirement or payroll decisions, rather than reacting to headlines about proposals that have not passed.

The Bottom Line

For 2026, the FERS change that is real, the October adjustment to agency contribution rates under OPM BAL 26-307, does not touch your paycheck or your pension.

The employee-rate increase that generated so many headlines was a 2025 proposal. It was removed before the House even voted on it and never became law. For most regular FERS employees, the 0.8%, 3.1%, or 4.4% employee contribution rate remains unchanged, and the High-3 pension calculation remains in effect.

These proposals recur, so staying informed matters. Federal Employee Advisor Network, a retirement planning firm specializing in federal employee benefits, helps federal employees model how legislative changes, enacted or merely proposed, would affect their specific retirement timeline. To review how your coverage category, years of service, and High-3 shape your pension, schedule a consultation with our team.

Frequently Asked Questions

1. Are FERS contribution rates changing in October 2026?

Yes, but only agency contribution rates. OPM Benefits Administration Letter 26-307 sets agency FERS contribution rates to change effective the first pay period on or after October 1, 2026. Standard employee rates of 0.8%, 3.1%, and 4.4% for most regular participants are unchanged and do not affect your paycheck.

2. How much do federal employees contribute to FERS in 2026?

Most regular FERS employees contribute 0.8% of basic pay if they entered before 2013, 3.1% if they entered in 2013, and 4.4% if hired in 2014 or later. OPM and Congressional Research Service materials keep these tiers in effect for 2026. Special-category employees, such as law enforcement officers, may pay higher rates.

3. Did the One Big Beautiful Bill increase FERS employee contributions?

No. The Congressional Research Service confirms the FERS employee contribution increase appeared in the House Oversight committee print but was removed before H.R. 1 passed the House. It was not in the final law signed July 4, 2025. Standard employee contribution rates stayed unchanged.

4. Will my federal pension be smaller because of the 2025 proposals?

No. Your FERS pension still uses the High-3 average basic pay formula. The Congressional Research Service confirms a proposal to switch to a High-5 average was removed before House passage. The employee contribution proposal would not have reduced pensions either. It asked employees to pay more for the same benefit.

5. Could FERS employee contribution rates still go up in the future?

Yes, it's possible. A FERS employee contribution increase has appeared as a budget offset in multiple proposals, so it may resurface in future reconciliation or appropriations bills. No employee increase is in current law. Verify any proposed change against enacted legislation and current OPM guidance before acting.

Disclaimer
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This article is for general informational and educational purposes only and does not constitute financial, tax, legal, or individualized retirement advice. Federal retirement contribution rates, benefit rules, payroll deductions, and agency funding requirements may change. Verify current information with your agency HR office and official OPM, TSP, IRS, and Social Security Administration resources before making retirement or financial decisions.