Under the Federal Employees Retirement System, how much you pay toward your Basic Benefit annuity depends almost entirely on when you were first hired. FERS contribution rates come in three tiers: 0.8% of basic pay for employees hired before 2013, 3.1% for those hired during 2013, and 4.4% for anyone hired on or after January 1, 2014. That deduction funds only the pension piece of FERS. Social Security, Medicare, and any Thrift Savings Plan contributions come out of your check on top of it.
The Three Hire-Date Tiers
Congress raised the employee share twice in two years, which is why coworkers doing identical jobs can pay very different amounts for the same future annuity. Your tier is locked in by your initial date of creditable federal service.
- Hired before January 1, 2013 (original FERS): 0.8% of basic pay. This is the rate that has applied since the system was created.
- Hired during calendar year 2013 (FERS-RAE): 3.1% of basic pay. The Middle Class Tax Relief and Job Creation Act of 2012 created this “Revised Annuity Employee” tier.
- Hired on or after January 1, 2014 (FERS-FRAE): 4.4% of basic pay. The Bipartisan Budget Act of 2013 added this “Further Revised Annuity Employee” tier.1U.S. Department of Commerce. Federal Employee Retirement System (FERS)
Every FERS employee across the three tiers earns the same annuity per year of service. A FERS-FRAE employee paying 4.4% gets no larger pension than someone paying 0.8% for the same career, which is the core frustration newer hires feel about the tiered structure.
Higher Rates for Special Category Employees
Law enforcement officers, firefighters, and air traffic controllers fall under “special category” coverage. The tier structure works the same way, but each rate sits half a percentage point higher:2eCFR. 5 CFR Part 842 – Federal Employees Retirement System Basic Annuity
- Original FERS: 1.3% of basic pay.3Office of Personnel Management. BAL 13-102 FERS Revised Annuity
- FERS-RAE: 3.6% of basic pay.
- FERS-FRAE: 4.9% of basic pay.
The higher contribution reflects a richer annuity: for special category service, the first 20 years count at 1.7% of the high-3 average salary per year rather than the standard 1%.4Office of the Law Revision Counsel. 5 USC 8415 Computation of Basic Annuity If none of those job categories describe your position, the regular rates apply.
What Your Agency Pays
Your agency pays far more toward your annuity than you do. OPM publishes “normal cost percentages” that represent the total cost of funding the annuity as a percentage of pay, and your deduction covers only a slice of it. Based on the most recent figures, the total normal cost is 19.2% for original FERS, 19.6% for FERS-RAE, and 19.9% for FERS-FRAE. After subtracting the employee share, the agency contribution comes out to roughly 18.4%, 16.5%, and 15.5% respectively.5Federal Register. Federal Employees Retirement System Normal Cost Percentages
The pattern makes sense when you look at it: FERS-FRAE employees put in more from their paychecks, so the agency tops up a smaller share to reach the same total. OPM recalculates these percentages periodically using actuarial assumptions about investment returns, life expectancy, and salary growth.6Office of Personnel Management (OPM). CSRS FERS Handbook Chapter 30 Employee Deductions and Agency Contributions
Social Security and Medicare on Top
Unlike the older Civil Service Retirement System, FERS employees pay into Social Security. That is a separate payroll deduction stacked on top of your Basic Benefit contribution. For 2026, the Social Security (OASDI) tax is 6.2% of pay up to $184,500 in earnings. Pay above that cap is not subject to the tax for the rest of the calendar year.7Social Security Administration. 2026 Cost-of-Living Adjustment (COLA) Fact Sheet
Medicare tax is 1.45% of all earnings with no cap. Once your wages cross $200,000 in a calendar year, an additional 0.9% Medicare tax applies to earnings above that threshold; your agency withholds it automatically, and there is no employer share of the additional tax.8Internal Revenue Service. Household Employers Tax Guide
Add it up. A FERS-FRAE employee earning below the Social Security wage cap pays 4.4% for the Basic Benefit, 6.2% for Social Security, and 1.45% for Medicare. That is 12.05% of basic pay in mandatory deductions before any TSP contribution.
Thrift Savings Plan Contributions and the 5% Match
The TSP is the third leg of FERS and works like a 401(k). New FERS employees are automatically enrolled at a 5% contribution rate, invested in the age-appropriate Lifecycle fund. You can change the amount or stop contributing at any time.9The Thrift Savings Plan (TSP). Implementation of 5 Percent Automatic Enrollment Percentage for Thrift Savings Plan
Your agency puts money into your TSP two different ways. The Agency Automatic (1%) Contribution goes in every pay period whether or not you contribute anything yourself. The Agency Matching Contribution only flows when you make your own elective contributions.10The Thrift Savings Plan (TSP). Contribution Types
The matching formula works like this:
- The first 3% of basic pay you contribute is matched dollar for dollar.
- The next 2% is matched at 50 cents on the dollar.
Contribute 5% and the agency puts in a total of 5% (the 1% automatic plus 4% in matching). Contribute less and you leave free money on the table. Contribute more than 5% and no additional match is generated, though your own contributions keep growing tax-advantaged.10The Thrift Savings Plan (TSP). Contribution Types
For 2026, the IRS caps elective deferrals at $24,500 across all traditional and Roth TSP contributions combined. If you are age 50 or older, you can add $8,000 in catch-up contributions. Participants who turn 60, 61, 62, or 63 during 2026 get a higher catch-up limit of $11,250 under the SECURE 2.0 Act.11The Thrift Savings Plan (TSP). 2026 TSP Contribution Limits
Your own TSP contributions and the agency matching are yours immediately. The Agency Automatic (1%) is subject to vesting: most FERS employees vest after three years of federal civilian service, with a two-year rule for congressional and certain noncareer positions. Leave before vesting and you forfeit the 1% money and its earnings.12TSP.gov. Summary of the Thrift Savings Plan
Getting Your Contributions Back If You Leave
If you leave federal employment before qualifying for an annuity, you can request a refund of your FERS Basic Benefit contributions. You must be separated for at least 31 days and cannot be eligible to start receiving an annuity within 31 days of filing. A current spouse must consent to the refund in writing.13Office of Personnel Management (OPM). FERS Refund Fact Sheet
OPM pays interest on the refund if your creditable service totals more than one year. Taking a refund voids all future annuity rights under FERS for that period of service. If you return to federal service later, you can redeposit the refunded amount plus interest to restore credit, but the cost grows the longer you wait.13Office of Personnel Management (OPM). FERS Refund Fact Sheet The refund covers only the Basic Benefit deductions; your TSP balance is separate and is handled under TSP withdrawal rules, and Social Security taxes are never refundable.