Last verified: October 15, 2026, against the sources linked below. Written by Casey Steward.
Your “high-3” is the single most important number in your FERS pension. OPM defines it as the highest average basic pay you earned during any 3 consecutive years of service (OPM: Computation). Here’s what counts, what doesn’t, and how to estimate yours.
What counts as basic pay
Per OPM, basic pay is the basic salary for your position, including increases for which retirement deductions are withheld, such as shift rates. Locality pay counts as basic pay for retirement purposes: FERS uses the CSRS definition of basic pay (5 U.S.C. 8401(4), citing 8331(3)), and the locality pay statute says locality payments are part of basic pay for retirement under chapter 84 (5 U.S.C. 5304(c)(2)).
| Usually counts | Does not count |
|---|---|
| Base salary for your grade and step | Overtime |
| Shift rates where retirement deductions are withheld | Bonuses and awards |
| Locality pay | Other payments not subject to retirement deductions |
“Three consecutive years,” not three calendar years
The high-3 is any 36-month stretch of continuous service, not necessarily calendar years. For most people it’s the final three years before retirement, but OPM notes it can be an earlier period if your basic pay was higher then. If you have less than three years of total service, OPM averages your basic pay over all of your creditable service.
A simple example
Suppose your basic pay over your last three years was $98,000, $101,000, and $104,000 (hypothetical figures, ignoring mid-year raises):
($98,000 + $101,000 + $104,000) ÷ 3 = $101,000 high-3
In real life, raises take effect partway through the year (the first pay period in January, step increases on their own schedule), so the true figure is a time-weighted average of each rate you were paid over the 36 months. Your agency’s retirement estimate will compute it precisely.
How the high-3 becomes a pension
Multiply your high-3 by your years of creditable service and by 1% (or 1.1% if you retire at 62 or older with at least 20 years). With a $101,000 high-3 and 30 years: $101,000 × 30 × 1% = $30,300 a year before reductions. Full details: How your FERS pension is calculated.
Ways people raise their high-3
- Timing: the period counts the rates you were actually paid, so a raise or promotion only helps the months after it takes effect.
- Promotions and step increases late in a career lift the average.
- Not overtime: working extra hours doesn’t change your high-3.
Frequently asked questions
Is the high-3 my last three years?
Usually, but not always. It’s the highest-paid 3 consecutive years, whenever they occurred.
Do bonuses count toward the high-3?
No. OPM excludes overtime and bonuses.
Does a 0% pay raise year affect my high-3?
A year without a raise means that year’s pay is no higher than the previous one, so your average grows more slowly. Pay adjustments for 2027 are not final until the President’s December executive order, usually issued in late December.
Try it
Estimate your pension with the FERS pension calculator
Sources
Educational only, not financial advice. The High Three is an independent publication. It is not affiliated with, endorsed by, or sponsored by the U.S. Office of Personnel Management (OPM), the Federal Retirement Thrift Investment Board, the Thrift Savings Plan (TSP), the IRS, or any government agency. Verify details with official sources and your agency HR office before making decisions.