Retirement contribution
How much do federal employees pay into FERS?
Every FERS-covered employee contributes a percentage of basic pay (which includes locality pay) each pay period toward their retirement annuity. The rate depends entirely on when you were first hired into a FERS-covered position:
| Category | Hire date | Employee rate | Tax treatment |
|---|---|---|---|
| FERS (original) | Before January 1, 2013 | 0.8% | Post-tax |
| FERS-RAE | Jan 1, 2013 – Dec 31, 2013 | 3.1% | Post-tax |
| FERS-FRAE | Jan 1, 2014 or later | 4.4% | Post-tax |
| Special provisions* | Any | +0.5% | Post-tax |
*Special provisions employees (law enforcement officers, firefighters, air traffic controllers) contribute an additional 0.5 percentage point above their category rate. Source: OPM FERS Information.
A critical detail: FERS contributions are deducted on a post-tax basis. Unlike TSP or FEHB, your FERS retirement contribution does not reduce your current taxable income. However, because you have already been taxed on your contributions, a portion of your future FERS annuity will be tax-free when you retire (the "tax-free recovery" portion, calculated using the Simplified Method on your annuity statement).
How much does the difference in rates actually cost?
The gap between FERS and FERS-FRAE is substantial over a career. Consider a GS-12 Step 1 employee earning approximately $91,000 in basic pay (illustrative example):
- FERS (0.8%): approximately $728 per year, or about $28 per biweekly pay period.
- FERS-RAE (3.1%): approximately $2,821 per year, or about $109 per biweekly pay period.
- FERS-FRAE (4.4%): approximately $4,004 per year, or about $154 per biweekly pay period.
That is a $126 per paycheck difference between the oldest and newest hire cohorts -- for the exact same retirement benefit. Congress increased these rates to reduce the federal deficit, not to increase benefits.
Are FEHB health premiums pre-tax or post-tax?
Pre-tax. Under the Premium Conversion program (IRC Section 125), your share of FEHB premiums is automatically deducted before federal income tax, Social Security tax, and Medicare tax are calculated. This reduces your taxable wages on your W-2, resulting in real tax savings.
You are enrolled in premium conversion by default. You would only pay FEHB post-tax if you signed a waiver opting out of premium conversion during Open Season -- something very few employees do, because there is rarely a benefit to opting out.
How does FEGLI life insurance work on your pay stub?
The Federal Employees' Group Life Insurance (FEGLI) program has several components:
- Basic coverage: Equal to your annual basic pay rounded up to the nearest $1,000, plus $2,000. The employee pays two-thirds of the cost; the government pays one-third. Basic FEGLI is deducted post-tax.
- Optional coverage (Options A, B, C): Additional coverage you can elect during Open Season or qualifying life events. These are fully employee-paid and also post-tax.
Because FEGLI is post-tax, the death benefit your beneficiaries receive is generally not subject to federal income tax (though very large amounts may trigger estate tax). Compare this with employer-paid group life insurance above $50,000 in the private sector, which creates imputed income.
FICA taxes: Social Security and Medicare
Federal employees covered by FERS pay the same FICA rates as private-sector workers:
- Social Security (OASDI): 6.2% on earnings up to the 2026 wage base of $184,500 (source: SSA). Once your year-to-date earnings cross this threshold, Social Security withholding stops, and your take-home pay increases for the remaining pay periods of the year.
- Medicare: 1.45% on all earnings with no cap. An additional 0.9% Medicare surtax applies to earnings exceeding $200,000 (single) or $250,000 (married filing jointly).
Together, FICA takes 7.65% of your pay up to the Social Security wage base, then 1.45% (or 2.35%) above it. Use our FICA tax calculator to see the exact annual impact on your salary.
TSP contributions on a federal paycheck
The Thrift Savings Plan is the federal equivalent of a private-sector 401(k). For 2026, the elective deferral limit is $24,500 (source: TSP Bulletin). Employees age 50 and older can contribute an additional $8,000 in catch-up contributions, and those turning 60-63 in 2026 can contribute $11,250 in enhanced catch-up under SECURE Act 2.0.
Traditional TSP contributions are pre-tax, reducing your taxable income now. Roth TSP contributions are post-tax, so they do not reduce current taxes but grow and are withdrawn tax-free in retirement. For a detailed look at how each option affects your paycheck, see our TSP contribution guide.
Your agency also contributes to your TSP: a 1% automatic contribution (regardless of whether you contribute) plus matching contributions if you contribute at least 5% of basic pay. The match formula is 100% of the first 3% plus 50% of the next 2%, for a total agency contribution of up to 5%.
Other deductions you may see
- FSAFEDS (Flexible Spending Accounts): Health Care FSA and Dependent Care FSA contributions are pre-tax, further reducing your taxable wages.
- Federal Long Term Care Insurance (FLTCIP): Deducted post-tax if you elected coverage.
- Dental and Vision (FEDVIP): Employee-paid premiums for the Federal Employees Dental and Vision Insurance Program are deducted pre-tax under premium conversion.
- Union dues: Deducted post-tax if you are a bargaining-unit employee who has authorized payroll deduction.
- Allotments: Savings bonds, charity (CFC), or personal allotments -- all post-tax.
Pre-tax vs. post-tax: the complete map
| Deduction | Pre-tax? | Reduces taxable income? |
|---|---|---|
| FERS retirement | No | No (but partial tax-free recovery in retirement) |
| FEHB health | Yes (Section 125) | Yes -- income, SS, and Medicare |
| FEDVIP dental/vision | Yes | Yes |
| FEGLI basic life | No | No |
| TSP traditional | Yes | Yes -- income only (not FICA) |
| TSP Roth | No | No |
| FSAFEDS | Yes | Yes -- income, SS, and Medicare |
| HSA (if HDHP) | Yes | Yes -- income, SS, and Medicare |
| Union dues | No | No |
Understanding which deductions are pre-tax is essential for calculating your actual take-home pay. Many new federal employees are surprised that their net paycheck is 25-35% less than their stated salary, depending on their FERS tier, FEHB plan, TSP contribution rate, and state of residence.
How to read your federal Leave and Earnings Statement (LES)
- Gross pay: Your biweekly basic pay plus any overtime, differentials, or awards for that period.
- Deductions section: Each line item shows the deduction name, current-period amount, and year-to-date total. Compare these against the rates above to verify accuracy.
- Net pay: What is deposited into your bank account. This is gross pay minus all deductions.
- Leave balances: Annual leave and sick leave hours accrued and used. These do not affect your deductions but are important for tracking your benefits.
If any deduction looks wrong, contact your agency's payroll office or your servicing Human Resources office. Common errors include FEHB premium changes not taking effect after Open Season, or FERS contributions reflecting the wrong tier after a break in service.
For broader context on how paycheck deductions work outside the federal system, see our pre-tax vs post-tax deductions guide. Military service members transitioning to federal civilian roles can compare with the military retirement pay tax guide.
Questions
FERS paycheck deductions FAQ
What percentage of my pay goes to FERS retirement?
It depends on when you were hired. FERS employees hired before 2013 contribute 0.8% of basic pay. FERS-RAE employees (hired in 2013) contribute 3.1%. FERS-FRAE employees (hired 2014 or later) contribute 4.4%. These rates apply to your basic pay only, not to locality pay, overtime, or bonuses. Special provisions employees such as law enforcement officers and firefighters pay an additional 0.5%.
Are FEHB premiums deducted pre-tax or post-tax?
Pre-tax. Under the Premium Conversion program (IRC Section 125), your FEHB premiums are automatically deducted before federal income tax, Social Security tax, and Medicare tax are calculated. This lowers your taxable income. You are enrolled in premium conversion by default unless you actively waive it.
Is FEGLI basic life insurance deducted pre-tax?
No. FEGLI premiums are deducted on a post-tax (after-tax) basis. This means they do not reduce your taxable income. However, because you pay with after-tax dollars, the death benefit paid to your beneficiaries is generally not subject to federal income tax.
What is the difference between FERS, FERS-RAE, and FERS-FRAE?
All three are the same retirement system with the same benefit formula. The only difference is the employee contribution rate. FERS (hired before 2013) pays 0.8%, FERS-RAE or Revised Annuity Employee (hired in 2013) pays 3.1%, and FERS-FRAE or Further Revised Annuity Employee (hired 2014 or later) pays 4.4%. The higher rates were enacted by Congress to reduce the federal deficit.
How much of a federal employee paycheck goes to FICA?
Federal employees pay the same FICA rates as private-sector workers: 6.2% for Social Security (OASDI) on earnings up to the annual wage base ($184,500 in 2026) and 1.45% for Medicare on all earnings. An additional 0.9% Medicare surtax applies to earnings above $200,000 for single filers or $250,000 for married filing jointly.
Can I see a sample federal employee paycheck breakdown?
Yes. For a GS-12 Step 5 employee in the DC locality earning roughly $99,000 annually and hired in 2014 (FERS-FRAE at 4.4%), the biweekly deductions would include approximately $168 for FERS, $288 for federal income tax (varies by W-4), $237 for Social Security, $55 for Medicare, plus FEHB and FEGLI premiums that depend on the plan chosen. The remaining amount is your net take-home pay.
- Sources: OPM FERS Information · OPM Premium Conversion · SSA 2026 Wage Base · IRS Rev. Proc. 2025-32 · TSP Bulletin 25-3.
- 🔄 Last updated August 4, 2026 · Tax year 2026
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