What Counts in Your High-3 (and What Doesn't)
Every FERS and CSRS annuity is a percentage of one number: the high-3 average salary. A $1,000 difference in it changes a 30-year FERS annuity by $300 a year for life, so it is worth knowing what goes into it and what stays out. The rules are in OPM's handbook and in the statutes, and none of them are complicated; they are just easy to get slightly wrong. This guide explains what the high-3 is, which pay counts, how OPM averages it, how the number flows into the annuity, and how to project it to a retirement date that has not arrived.
The definition
The high-3 is the highest average basic pay you earned over any three consecutive years of creditable service (5 U.S.C. 8331 for CSRS and 8401 for FERS). Two phrases carry most of the weight.
"Any three consecutive years." It is the best three-year stretch, not necessarily the last three. For most people pay rises over a career so the last three years are the highest, and in that case the two are the same. If your pay dropped late in your career (a move to a lower grade or a lower-paying position), the high-3 may come from an earlier period.
"Average basic pay." OPM does not average three annual salaries. It averages the actual rates in effect over the three years, weighted by how long each rate applied. The 3 years are 78 biweekly pay periods, and a raise that takes effect partway through contributes only for the pay periods that remained. A January raise therefore counts at its new rate for each pay period after it starts and at the old rate for the pay periods before.
What counts
| Counts toward the high-3 | Does not count |
|---|---|
| Base pay (the rate for your grade and step) | Overtime pay |
| Locality pay, which is part of basic pay for retirement | Bonuses and cash awards |
| Special salary rates | Lump-sum payments for annual leave |
| Allowances and most premium pay |
Two cautions. The line between "basic pay" and "premium pay" has exceptions for particular categories, listed in 5 U.S.C. 8331(3): availability pay for criminal investigators (5 U.S.C. 5545a), administratively uncontrollable overtime for law enforcement officers (5 U.S.C. 5545(c)(2)) and standby premium pay (5 U.S.C. 5545(c)(1)) are basic pay for retirement, while ordinary overtime, bonuses, allowances and lump-sum leave payments are not. If you are in a special category, or if you have recently changed pay systems, ask your HR office how the pay table treats you. The second caution is about sick leave and annual leave. Unused sick leave adds time to the computation (see the sick leave chart guide), not pay to the high-3, and a lump-sum annual leave payment on retirement is a cash payment outside the annuity. The calculator on this site takes your high-3 as a plain number.
Where to find the figures: your SF-50 notifications of personnel action show the rate of basic pay and the locality-adjusted pay for each period of your career. Add up the periods in your three highest years, weighted by pay periods, or ask your agency for a high-3 estimate. If you are in the last years of your career, your agency's retirement specialists can calculate it from your payroll record.
How the high-3 turns into an annuity
The annuity is the high-3 multiplied by an accrual factor that depends on your service. For a FERS retiree with 31 years 2 months of service and a high-3 of $53,221 (OPM's own Chris Morgan example), the factor is 0.311667 and the unreduced annuity is $16,587.23. For a FERS retiree with 30 years the factor is 0.300000, so every $1,000 of high-3 produces exactly $300 of annuity. At 1.1% (age 62 or older with 20 years) the same $1,000 produces $330 for 30 years. In CSRS the amounts are larger: for 30 years, 56.25% of the high-3, or $562.50 per $1,000. The FERS vs CSRS guide compares the formulas.
The high-3 sits at the front of the calculation, so any error in it carries through every later line: age reduction, survivor election and the monthly payment are all computed from the annuity it produces.
How much each $1,000 of high-3 is worth depends on the formula that applies:
| Situation | Accrual factor | Annuity per $1,000 of high-3 |
|---|---|---|
| FERS, 13 years 6 months (Lea Williams, before any age reduction) | 0.135000 | $135 |
| FERS, 20 years, 1.0% | 0.200000 | $200 |
| FERS, 20 years, age 62 or older (1.1%) | 0.220000 | $220 |
| FERS, 30 years, 1.0% | 0.300000 | $300 |
| CSRS, 30 years | 0.562500 | $562.50 |
This is also the quickest way to judge how much a disputed pay item matters. If a $3,000 award were wrongly counted in one year of a 30-year FERS high-3, the three-year average would rise by $1,000 and the annuity by $300 a year; a mistaken locality rate can be worth far more than that.
Part-time service
If you worked part-time, the high-3 is computed from the full-time rate for the position, not the part-time earnings. What changes is the annuity: OPM multiplies the annuity by a proration factor (actual hours divided by full-time hours over your FERS service) rounded to the nearest percent. An example that follows the method in Chapter 55 of the handbook: a $100,000 high-3 with 37 years of service gives 37%, and at a 93% proration factor the annuity is $34,410. The free calculator on this site does not handle part-time service; the High Three app computes the proration factor from your part-time periods.
Projecting a future high-3
If you are planning a retirement date years away, you need a projected high-3. The method the High Three app uses is deliberately plain: take your current annual rate, apply an assumed yearly raise, and average the three annual rates that end on the retirement date.
Take a current rate of $100,000, a 3% raise each year, and a retirement four years from now. The three annual rates ending at that date are:
| Year of the projection | Rate ($100,000 x 1.03 to the power of the year) |
|---|---|
| Year 2 | $106,090.00 |
| Year 3 | $109,272.70 |
| Year 4 (retirement year) | $112,550.88 |
| Average (the projected high-3) | $109,304.53 |
At 30 years of FERS service and the 1.0% multiplier, that high-3 gives an unreduced annuity of 0.300000 x $109,304.53 = $32,791.36 a year. The projection has two weaknesses you should know about. It treats a year's raise as a single annual step, whereas real raises arrive in January (the general schedule increase) and at step-increase dates, so the true weighted average will differ slightly. And a rate of growth that includes promotions is a guess; a raise assumption of 2% versus 4% changes the high-3 in this example by more than $6,000 (about $106,100 at 2% against $112,500 at 4%). For that reason the calculator asks you for your own figure rather than projecting it, and the app lets you try several.
If you want to check a projection, use your most recent SF-50 for the current rate, the OPM pay tables for the general schedule increase in each year (and your locality area), and the step-increase intervals from your agency's pay table. OPM's page on computing your annuity gives the official description.
A short checklist
- Use basic pay plus locality pay, not total compensation.
- Leave out overtime, bonuses, awards and leave payouts.
- Use the best three consecutive years, not automatically the last three.
- For part-time service, use full-time rates and let the proration factor handle the rest.
- Treat any projected figure as an estimate, and ask HR for the official computation before you decide on a date.
Citations: 5 U.S.C. 8331 and 8401; OPM CSRS/FERS Handbook Chapter 50 (computation under the general formula) and Chapter 55 (part-time employees); OPM's FERS computation page. This is an estimate, not advice; your agency's HR office and OPM compute your actual annuity.
More guides
- MRA+10 Retirement: How the 5% Per Year Reduction Really Works (Full Months, Postponing, the 20-Years-at-60 Exception)
- FERS Supplement in 2026: Who Gets It, How It's Computed, and the $24,480 Earnings Test
- The 2,087-Hour Sick Leave Chart: What Your Balance Adds to Your Annuity
- FERS vs CSRS: The Formulas Side by Side (1%/1.1% vs 1.5/1.75/2%, the 80% Cap, Special Provisions)