What Is the Overtime Cap for Federal Employees?

The overtime cap for federal employees works as a biweekly ceiling: in any two-week pay period, your combined basic pay and premium pay cannot exceed the greater of the biweekly rate for GS-15, step 10 (including locality pay) or the biweekly rate for Level V of the Executive Schedule. Level V is $184,900 per year in 2026,¹ which works out to roughly $7,088 biweekly. In many locality areas, GS-15, step 10 with locality pay is higher and becomes the operative cap.

Who the Cap Actually Applies To

Whether the cap affects you at all depends on which overtime system covers your job. Federal overtime runs on two parallel tracks.

If you’re covered by the Fair Labor Standards Act (nonexempt), you earn overtime at one and one-half times your regular hourly rate for hours worked beyond 40 in a workweek. FLSA overtime pay is not considered “premium pay” under Title 5, so it is not subject to the biweekly or annual premium pay caps. Compensatory time earned in place of FLSA overtime is also excluded, along with compensatory time off for travel, comp time for religious observances, credit hours under flexible schedules, and hazardous duty pay.²

If you’re FLSA-exempt, your overtime is paid under Title 5, and that overtime does count as premium pay. Your rate depends on where your basic pay sits relative to the GS-10, step 1 threshold. Employees at or below that rate get one and one-half times their own hourly rate. Employees above it get the greater of one and one-half times the GS-10, step 1 hourly rate or their own straight hourly rate, whichever is more. In practice, higher-graded exempt employees often earn overtime at just their regular hourly rate rather than time-and-a-half. And all Title 5 overtime must be officially ordered or approved in advance, or formally approved afterward, to be compensable.³

So the biweekly cap is really an FLSA-exempt problem. If you’re nonexempt, you can work as much overtime as your agency will authorize and the cap won’t touch it.

How the Biweekly Cap Works

For each biweekly pay period, an FLSA-exempt employee’s combined basic pay plus premium pay cannot exceed the greater of the biweekly rate for GS-15, step 10 (with applicable locality pay or special rate supplement) or the biweekly rate for Level V of the Executive Schedule.⁴ Premium pay for this purpose includes Title 5 overtime, night differential, Sunday premium, holiday pay, standby duty pay, and administratively uncontrollable overtime.²

The Level V component is $184,900 annually in 2026.¹ Using the standard conversion (annual rate divided by 2,087 hours, rounded to the nearest cent, then multiplied by 80), the biweekly Level V rate comes to roughly $7,088. That’s the floor.

How Locality Pay Raises the Cap

Because the GS-15, step 10 side of the comparison includes locality pay, the biweekly cap varies by geographic area. The Rest of U.S. locality adjustment for 2026 is 17.06%, while higher-cost areas carry adjustments ranging from roughly 25% to nearly 38%. In localities where GS-15, step 10 plus locality exceeds the Level V rate, the cap rises above the $184,900-based floor. An FLSA-exempt employee in San Francisco or New York has a meaningfully higher ceiling than a colleague in a lower-cost region doing the same work.

When Agencies Switch to the Annual Cap

The biweekly cap is the default, but agencies can switch to an annual cap in two situations. First, when an agency head determines that an emergency exists, employees performing work connected to that emergency must be paid under the annual limitation. Second, when an agency head decides an employee is needed for work critical to the agency’s mission, the agency may apply the annual cap.⁵

Under the annual cap, combined basic pay and premium pay for the calendar year cannot exceed the greater of the maximum annual GS-15 rate (with locality pay) or the annual Level V rate, both determined as of the last day of the calendar year.⁵ The annual version is more flexible because it allows big overtime spikes in individual pay periods that would blow through the biweekly limit, as long as the year-end total stays under the ceiling. This matters most for employees responding to natural disasters, national security events, or extended surge operations.

The Aggregate Pay Limitation

A separate ceiling sits above the premium pay caps. Under 5 U.S.C. § 5307, no federal employee’s total pay in a calendar year can exceed the rate for Level I of the Executive Schedule. For agencies that have certified their Senior Executive Service performance appraisal systems, the ceiling rises to the Vice President’s salary, which is $292,300 in 2026.⁶

If premium pay would push your total compensation past this aggregate limit, the excess isn’t lost. Any amount held back is paid to you as a lump sum at the beginning of the following calendar year, and that lump sum then counts toward the new year’s aggregate limit.⁶

What Happens When You Hit the Cap

If your combined basic pay and premium pay would exceed the biweekly cap, the agency reduces the premium pay portion to keep you within the limit. You still work the hours. You just don’t get paid for all of them at full value. This tends to hit employees at higher GS grades who work significant overtime, because their basic pay already consumes most of the cap before any premium pay is added.

Compensatory time off isn’t a workaround. For FLSA-exempt employees, the dollar value of comp time earned counts as premium pay for purposes of the biweekly cap,² so electing time instead of cash doesn’t bypass the ceiling.⁷ Comp time also has to be used within 26 pay periods after it’s earned. For nonexempt employees, unused balances must be paid out at the overtime rate in effect when earned; for exempt employees, agencies may pay out or allow forfeiture, unless workload demands beyond the employee’s control prevented the time from being used.⁸

Criminal Investigators Are on a Different System

Federal criminal investigators (special agents at agencies like the FBI, DEA, and Secret Service) operate under a separate structure called availability pay. Instead of traditional overtime for unscheduled hours, they receive a flat 25% supplement on top of basic pay to compensate for their requirement to be available beyond a 40-hour week.⁹ Qualifying requires averaging at least two hours of unscheduled duty per regular workday over the course of a year.

Availability pay replaces most other forms of premium pay. An investigator receiving it cannot also receive pay for administratively uncontrollable overtime, standby duty, or FLSA overtime, though they can still receive premium pay for regularly scheduled overtime, night duty, Sunday work, and holiday duty on top of availability pay.⁹ The same biweekly premium pay cap under 5 U.S.C. § 5547 still applies, so basic pay plus availability pay plus any other eligible premium pay remains bounded by the GS-15, step 10 or Level V ceiling.

1
U.S. Office of Personnel Management. Memo on January 2026 Pay Adjustments
2
U.S. Office of Personnel Management. Premium Pay (Title 5)
3
Office of the Law Revision Counsel. 5 USC 5542 – Overtime Rates; Computation
4
eCFR. 5 CFR 550.105 – Biweekly Maximum Earnings Limitation
5
eCFR. 5 CFR 550.106 – Annual Maximum Earnings Limitation
6
Office of the Law Revision Counsel. 5 USC 5307 – Limitation on Certain Payments
7
eCFR. 5 CFR 550.114 – Compensatory Time Off
8
U.S. Office of Personnel Management. Fact Sheet: Compensatory Time Off
9
U.S. Office of Personnel Management. Fact Sheet: Availability Pay