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Your High 3 Salary

Your High 3 Salary is the highest average basic pay you earned during any 3 consecutive years of Federal service.

Basic pay includes:

  • Salary for your position
  • Shift rates
  • Locality pay

Basic pay does NOT include:

  • COLA – Cost of Living Adjustment
  • Overtime pay
  • Bonuses

Where can you find info on your basic pay? Look on your Standard Form 50’s (SF50). Sometimes you can also find it on your Leave and Earning Statements (LES).

You should also know that your High 3 Salary is calculated based on three *consecutive* years, NOT calendar years. So your High-3 years might be April 2009 – April 2012.

Most people earn their highest pay during their last three years of service. But not always. Your High 3 years could be from an earlier time in your career.

For Federal Employees in Alaska, Hawaii, Puerto Rico & Other US Territories

Federal Employees in Non-Foreign Areas like Alaska, Hawaii and Puerto Rico, are being transitioned from receiving COLA to Locality Pay.

Locality Pay *is* considered when calculating your High 3, but COLA is not.

Even though Locality Pay is being phased in, if you had time outside of Alaska, Hawaii, or the US Territories in an area with high Locality Pay, be sure to review your entire career before automatically assuming your High-3 are your last three years of service.

Click here to learn more about the change from COLA to Locality Pay. 

How to Calculate High 3 Salary

Here are two methods you can use to calculate your High-3:

Quick Estimate for High-3

If you are 5+ years from retirement – you might not want to spend tons of time calculating your High-3 Salary.

If you’re just looking for a ballpark estimate, this is the fastest way to get a rough idea of your High 3.

Just take the three consecutive years where you received the highest pay (usually your last 3 years) and take your basic pay from the year in the middle.

Simple – sure, but it’s often pretty close to your actual High 3 Salary. And if you’re 5+ years from retirement, your High 3 will probably change by the time you’re ready to retire anyway.

More Precise Calculation for High-3

If you are close to retirement, you’ll want a more specific calculation of your High-3.

Gather your SF50’s and get ready for some number crunching.

Since your pay probably increased at odd times during the year – you’ll need to account for those times when calculating your High 3 Salary.

Take a look at the example below…

Example of High-3 Calculation

In this example, this person’s High-3 time was from 9/1/2005 to 8/31/2008. Their basic pay increased several times during this period.

Let’s take a look…

High 3, high 3 salary, federal pension

*To get your “Time Factor” – you can use the Time Factor Table.

Looking at the first row, we see that from 9/1/2005 to 1/4/2006, this person had a basic pay of $48,657.

Four months and three days represents the time between 9/1/2005 and 1/4/2006. Using the Time Factor Table, we find that 4 months and 3 days = 0.342 of a year.

Then we multiply their basic pay of $48,657 x 0.342 to get $16,641. This is the actual basic pay that was earned during this time period.

We complete a row every time they received an increase in basic pay.

Then we add the last column up to get the total amount of basic pay they received during their High-3. In this example, the number is $165,159. Then we take that number and divide by 3 to get their High 3 Salary of $55,053.

It can be a bit tedious. But, if you had several changes in your basic pay during your High-3 years, this method will help you calculate your High-3 pay to use in your Federal pension calculation.

Blank Table for You to Calculate High-3

Here is a blank table that you can print out and use to calculate your High Three Salary.

If your High-3 will be based on the last three years of service, start by subtracting 3 years from your planned retirement date.

If there was another time in your career that had higher pay, use those 3 years instead.

High 3 retirement, high 3 salary, federal retirement

Return from High 3 Salary to FERS Retirement 

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