What Is High-3 Salary? How Federal Employees Calculate Their FERS Pension (2026)

High-3 salary, defined: High-3 salary is the average of a federal employee's highest-paid 36 consecutive months of basic pay. It is the salary component of the FERS pension formula (High-3 × years of service × multiplier). It includes base pay and locality pay but excludes overtime, bonuses, and awards.

If you're covered by the Federal Employees Retirement System (FERS), your pension — officially the Basic Annuity — is one of three pillars of your retirement income, alongside Social Security and the Thrift Savings Plan (TSP). Every dollar of that pension is built on top of one number: your High-3. Yet most employees carry a vague, slightly-too-optimistic estimate in their heads, usually because they're quietly substituting their current salary for the number the Office of Personnel Management (OPM) will actually use.

This guide breaks down what the High-3 is, how it's calculated, what pay counts toward it, and how to find yours.

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1. What "High-3" Actually Means

The High-3 (sometimes written "high-three" or "high-3 average salary") is the average annual rate of basic pay during your highest-paid 36 consecutive months of federal service.

Three words in that definition do all the work:

• Average — not your peak salary, but the average across a 3-year window. Because your pay typically rises over those 36 months, your High-3 almost always lands below your final salary.
• Consecutive — the 36 months must be unbroken. For most people that's their final three years, since pay generally climbs over a career. But not always (see Section 5).
• Basic pay — a specific, defined category. A lot of what hits your paycheck does not count (see Section 3).

According to OPM, your high-3 is the highest average basic pay you earned during any three consecutive years of service — usually your final three years, but it can be an earlier period if your basic pay was higher then.

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2. The High-3 Formula: How It's Calculated

The formula itself is simple:

High-3 = (total basic pay earned during your highest 36 consecutive months) ÷ 3

OPM adds up the basic pay you earned across your highest-paid 36 consecutive months and averages it into an annual figure. The important detail is that the calculation is time-weighted: each pay rate counts for exactly as long as it was actually in effect, using OPM's convention that one month equals 30 days and one year equals 360 days.

That's why your High-3 isn't just the average of your last three annual salaries. A raise that lands halfway through the window only counts for the portion of time it actually applied — which is precisely why your High-3 sits below your final salary rate. The worked example in Section 6 shows the difference in dollars.

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3. What Counts as Basic Pay (and What Doesn't)

This is where most estimates go wrong. "Basic pay" for High-3 purposes is narrower than your gross earnings.

OPM's rule is simpler than any list: basic pay is the pay from which retirement deductions are withheld. That's your base salary plus locality pay, plus certain add-ons such as shift rates where deductions are taken — and it specifically excludes overtime, bonuses, and awards.

Generally counts toward your High-3

• Base salary (your GS or equivalent rate of pay)
• Locality pay — the geographic adjustment for your duty station, and often the single biggest add-on. For 2026, locality ranges from 17.06% (Rest of U.S.) to 46.34% (San Jose–San Francisco–Oakland), and it's fully creditable.
• Law Enforcement Availability Pay (LEAP) for eligible criminal investigators
• Shift rates / night shift differential for Federal Wage System (FWS) employees, where retirement deductions are withheld
• Certain other premium pays defined as basic pay by statute for specific occupations

Generally does NOT count

• Overtime pay (Title 5 overtime)
• Bonuses, cash awards, and performance awards
• Recruitment, relocation, and retention incentives
• Holiday premium pay
• Travel reimbursements and per diem
• Lump-sum payment for unused annual leave at retirement
• Military pay during active-duty service

Illustrative note only. The "retirement deductions withheld" test resolves most cases, but whether a specific differential or premium counts toward your High-3 depends on your occupation, appointment, and the governing statute — OPM makes the final determination. This is not financial advice.

The practical takeaway: if a meaningful share of your take-home comes from overtime or awards, your High-3 — and therefore your pension — will be lower than your paycheck suggests.

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4. High-3 vs. Final Salary

The most expensive misconception in federal retirement planning is treating your final salary as your pension base. They are not the same number, and OPM only uses one of them.

Because your salary rises over your final years, averaging the last 36 months pulls the figure below your last paycheck. Section 6 puts real numbers on that gap.

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5. The 36-Consecutive-Month Rule, in Practice

Because locality pay and within-grade step increases push your salary up over time, your highest 36 consecutive months are usually your last three years on the rolls. Each within-grade increase (WGI), promotion, and annual pay-schedule adjustment nudges the average higher.

But "usually" isn't "always." Your High-3 window can sit earlier in your career if:

• You took a downgrade or moved to a lower-graded position late in your career.
• You relocated to a lower-locality area (e.g., from a high-locality metro to a Rest-of-U.S. duty station), cutting your locality adjustment.
• You shifted to part-time at the end of your career (see below).

In those cases, OPM identifies whichever unbroken 36-month stretch produces the highest average — it isn't locked to your final three years.

Special situations that change your High-3

A break in service. A break doesn't erase your earlier service. OPM still identifies the highest-paid 36 consecutive months of creditable service — that window simply has to fall within a single continuous stretch, since the months must be consecutive. After a break, the highest window could sit entirely in your pre-break or post-break service, whichever was higher-paid.

Part-time service. The math gains a layer. OPM first computes a deemed High-3 using the full-time salary rate your position would have paid, calculates a full-time-equivalent annuity, then applies a part-time proration factor based on your actual hours worked versus full-time hours over your career. Going part-time doesn't lower the salary rate in your High-3 — but it scales down the resulting pension in proportion to the part-time service.

Military and bought-back service. Active-duty military pay never counts toward your High-3. But if you complete a military service deposit (buyback), those years count toward your years of creditable service — the other big variable in the formula — even though they don't touch the High-3 itself.

Illustrative note only. Part-time and break-in-service computations are genuinely intricate, and small details change the result. Treat any self-estimate as a planning figure and confirm with OPM. Not financial advice.

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6. Worked Example: Why High-3 Does Not Equal Final Salary

Here's the difference in dollars. Suppose your basic pay over your final 36 months looked like this (figures illustrative):

Time-weighted High-3:

(108,000 × 18) + (112,000 × 12) + (116,000 × 6)
= 1,944,000 + 1,344,000 + 696,000
= 3,984,000 ÷ 36 = $110,667

Your High-3 is $110,667 — about $5,300 below your $116,000 final salary.

Now watch what that gap does to a pension, assuming 30 years of service and the standard 1.0% multiplier:

That's roughly $1,600 per year of phantom pension — about $133 a month you were never going to receive. Over a 25-year retirement, before COLAs even enter the picture, the overestimate exceeds $40,000.

Illustrative example only. Figures use a hypothetical salary history and the standard 1.0% multiplier. Your actual High-3, multiplier, and annuity depend on your specific pay record and OPM determinations. Not financial advice.

This is exactly why our engine uses the OPM-defined High-3 rather than a final-salary shortcut. For the full annuity formula this number feeds into, see our companion guide, FERS Pension Calculator (2026).

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7. How Do I Find My High-3 Salary?

You don't have to guess. Your salary history lives in documents you already have access to:

1. Your SF-50s (Notification of Personnel Action). Each one records your rate of basic pay and the effective date. The series of SF-50s covering your last several years maps your salary timeline precisely.
2. Your eOPF (electronic Official Personnel Folder), where those SF-50s are stored.
3. Your LES / pay history, which shows base plus locality.

Pull the basic-pay figure and effective date from each action over your highest-paid stretch, then time-weight them across 36 consecutive months. Or enter the same figures into the High-3 Calculator and let it handle the weighting and date math.

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8. Where High-3 Fits in the Bigger Picture

Your High-3 doesn't act alone. It's one of three variables, and the other two matter just as much:

• Years of creditable service — including unused sick leave and any bought-back military time.
• The multiplier — 1.0% for most retirements, or 1.1% if you retire at age 62 or later with at least 20 years of service. That 0.1% bump is worth 10% more pension for life.

High-3 also indirectly shapes decisions further down the line — your FERS Supplement eligibility, your survivor benefit election, and the classic retire-at-57-vs-62 tradeoff, where a few more years can lift both your High-3 and your multiplier at once. To see when you're first eligible, use the MRA Finder; to map your salary growth, the GS Pay Calculator.

Every FedHorizon figure is built directly from OPM published documentation — see our Methodology page for full formula citations and source references.

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9. Common Mistakes That Inflate Your High-3 Estimate

1. Using your final salary instead of the 3-year average. The most common and most expensive error (see Section 6).
2. Counting overtime, awards, or bonuses. None of these are basic pay.
3. Forgetting a late-career locality drop. A move to a lower-locality duty station can pull your High-3 below where you assume it sits.
4. Ignoring part-time proration. Part-time service scales the pension down even when the salary rate looks full.
5. Assuming the window is always your last 3 years. It's the highest 36 consecutive months, which can sit earlier after a downgrade.

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Frequently Asked Questions

Is the High-3 based on my last 3 years or my best 3 years? Your highest 36 consecutive months. For most people that's the final three years, because pay rises over time — but if you took a downgrade or moved to a lower-locality area at the end, an earlier window may be higher, and OPM uses whichever is greatest.

Does locality pay count toward my High-3? Yes. Locality pay is part of basic pay and is fully creditable. In 2026 it ranges from 17.06% (Rest of U.S.) to 46.34% (San Jose–San Francisco–Oakland), so it materially raises your High-3.

Does overtime count toward my High-3? No. Title 5 overtime, bonuses, cash awards, and most incentives are excluded. The test OPM uses: basic pay is the pay from which retirement deductions are withheld.

Does my annual leave payout count toward my High-3? No. The lump-sum payment for unused annual leave at retirement is not basic pay and does not affect your High-3.

Does military buyback increase my High-3? No. A military service deposit adds to your years of creditable service, not your High-3 — active-duty military pay is never part of the High-3 average.

Does a promotion increase my High-3? Usually, yes. A promotion raises your basic pay rate, and because the High-3 is time-weighted, the higher rate lifts the average for every month it's in effect within your window.

Can my High-3 be earlier than my last 3 years? Yes. If your basic pay was higher during an earlier 36-consecutive-month stretch — typically after a late-career downgrade or a move to a lower-locality area — OPM uses that earlier window.

Why is my High-3 lower than my current salary? Because it's a 3-year average and your salary has been climbing. The earlier, lower-paid months in the window pull the average below your current rate.

How do part-time years affect my High-3? The High-3 itself uses the full-time salary rate, but the resulting annuity is then prorated based on your actual hours worked versus full-time over your career — so part-time service lowers the pension proportionally.

Where can I see the exact numbers OPM will use? Your SF-50s and eOPF record every rate of basic pay and effective date. Enter them into the High-3 Calculator for a time-weighted result.

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The Bottom Line

Your High-3 is the foundation everything else is built on: it's the average of your highest 36 consecutive months of basic pay, it almost always sits below your final salary, and it excludes the overtime, awards, and bonuses that pad your paycheck. Get this number right and the rest of your pension math follows. Get it wrong — usually by anchoring on final salary — and you'll plan around a retirement income that's thousands of dollars higher than the one you'll actually receive.

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