Salary of Government Employees: Facts You Should Know
If you are a government worker — or planning to join public service — understanding how your salary works is essential.
Unlike private sector pay, government salaries are not negotiated. They follow a structured, legally mandated system designed to ensure fairness, uniformity, and fiscal accountability across all government agencies.
What Is a Government Employee Salary?
A government employee salary is the fixed monthly compensation received by individuals employed in national government agencies, local government units (LGUs), government-owned and controlled corporations (GOCCs), and other instrumentalities of the government.
The amount is not left to the discretion of agency heads — it is set by law and applied uniformly to all covered positions.
ICYDK: Basic Pay vs. Salary vs. Wages
Often, basic pay, salary and wages are used interchangeably. However, they are different from each other. Basic pay refers to the primary compensation for work performed, excluding any other payments, allowances and fringe benefits.
On the other hand, salary refers to the basic pay for work performed by an employee paid on a monthly basis while wages refer to the basic pay for work performed by an employee paid on a daily or hourly basis.
How is the salary of government employees determined?
Government employee salaries are determined through a process called Position Classification and Compensation, administered primarily by the Department of Budget and Management (DBM). Each position is evaluated based on:
- The nature and complexity of the work;
- The level of responsibility involved; and
- The required qualifications and competencies.
Once a position is classified, it is assigned a corresponding Salary Grade (SG), which then dictates the exact monthly pay.
The President of the Philippines, upon recommendation of the DBM, issues the official salary schedule that prescribes the specific rates.
What Is a Salary Grade?
A Salary Grade (SG) is a numerical classification ranging from SG-1 (lowest) to SG-33 (highest) that indicates the pay level of a government position.
DID YOU KNOW:
Salary Grade 33 is exclusive to the position of the President of the Philippines. No other position holds the same salary grade.
Key points to remember:
- The salary grade is attached to the position, not to the person holding it; and
- Each salary grade has corresponding step increments (Step 1 to Step 8), which allow for salary progression based on performance or length of service.
What is Step Increment?
Within each Salary Grade, a government employee does not stay at a fixed rate forever. Each Salary Grade is divided into eight (8) steps — Step 1 being the entry rate and Step 8 being the maximum.
When a government employee is first appointed to a position, they are generally placed at Step 1 of their assigned Salary Grade. Over time, they can move up the steps — and with each step up comes a corresponding increase in monthly pay.
Step increments are granted either through length of service (after every three years of satisfactory performance within the same position) or through meritorious performance (for employees who consistently receive outstanding or very satisfactory ratings in their Performance-Based Bonus or SPMS evaluation).
Our readers also read:
What is the Salary Schedule?
The Salary Schedule is an official table issued by the government that lists the exact monthly salary rates for every Salary Grade and step increment. It is the authoritative reference for payroll computation across all government agencies.
The salary schedule is usually provided in the Salary Standardization Law (SSL) and the implementing guidelines issued by the DBM for the SSL.
The Salary Schedule is used to:
- Compute the basic monthly pay of each employee based on their assigned SG and step;
- Determine salary increases upon merit or length-of-service-based step increments;
- Serve as the basis for computing, year end and mid year bonus, retirement pay, and other benefits; and
- Guide DBM and COA in reviewing and auditing agency payrolls.
DID YOU KNOW:
In national government agencies (NGAs), local government units (LGUs) and certain GOCCs, the document that contains the salary for each salary grade and step is called Salary Schedule. For military and uniformed personnel it is called Base Pay Schedule.
What Is a Salary Increase in Government?
A salary increase in government refers to the upward adjustment of the monthly pay rates prescribed in the Salary Schedule.
Unlike in the private sector where salary increases can be negotiated or granted at the employer’s discretion, salary increases in government are mandated by law.
Salary increase in government does not happen automatically each year — they require an act of Congress or an executive issuance before they take effect. This is why government salary increases are often tied to the passage of a new Salary Standardization Law (SSL) or a related executive order.
The most common mechanism for a government-wide salary increase is through the enactment of a new SSL. It is important to note that a salary increase under an SSL is different from a step increment. A salary increase raises the base rates across the entire Salary Schedule and applies to all government employees simultaneously.
A step increment, on the other hand, is an individual progression within the same salary grade based on performance or years of service. In short, SSL increases lift the floor for everyone, while step increments reward individual growth within that new floor.
NOSA vs. NOSI: What Is the Difference?
A Notice of Salary Adjustment (NOSA) is an official document issued to a government employee informing them of a change in their monthly salary rate as a result of a government-wide salary increase — typically following the implementation of a new Salary Standardization Law or executive order.
The NOSA reflects the new salary rate prescribed in the updated Salary Schedule and is issued to all covered employees simultaneously. It does not change the employee’s Salary Grade or step — it simply updates the peso value attached to their current SG and step based on the new schedule.
A Notice of Step Increment (NOSI), on the other hand, is issued to a specific employee who has qualified for a step increment within their current Salary Grade. This happens either after three years of satisfactory service or upon recognition of meritorious performance.
Unlike the NOSA, the NOSI reflects an individual progression — it moves the employee from, say, Step 1 to Step 2 of their SG, resulting in a higher monthly pay based on the step differential in the Salary Schedule.
In simple terms, the NOSA is collective — it affects everyone and is driven by a new law or policy. The NOSI is individual — it affects one employee at a time and is driven by performance or length of service. Both result in a higher take-home pay, but they come from entirely different grounds.
Legal Bases
Hereunder are laws, executive orders, and issuances which provide the legal foundation for the grant of salary to government employees in the Philippines. Visit these references to learn more about the salary of government employees.
Presidential Decree No. 985 (s. 1976)
The original law establishing a unified position classification and pay plan for the national government, later amended by RA 6758.
Republic Act No. 6758 – Compensation and Position Classification Act of 1989
The primary law that standardizes compensation and position classification in the national government.
Executive Order No. 201 (s. 2016)
Modifies the salary schedule for civilian government personnel and authorizes the grant of additional benefits to both civilian personnel and military and uniformed personnel. The salary increase in this SSL was implemented from 2016 to 2019.
Republic Act No. 11466 – Salary Standardization Law V (2020)
SSL which provide for salary increases for all civilian government personnel from 2020 to 2023.
Executive Order No. 64, (s. 2024) — Updates the salary schedule for civilian government personnel and authorizes the grant of additional allowance (i.e., Medical Allowance) and for other purposes. The salary increase in this SSL is implemented from 2024 to 2027.
Republic Act No. 7160 – Local Government Code of 1991
Governs the compensation and personnel management of employees in local government units (LGUs).
General Appropriations Act (GAA) – Enacted Annually. The yearly national budget law that appropriates funds for the salaries of all government employees.
Implementing Rules and Regulations
Hereunder are the implementing rules and regulations on the grant of salaries to government employees: (visit the links below to access the references)
National Government Agencies (NGAs)
Government-owned and Controlled Corporations (GOCCs)
Military and Uniformed Personnel
You May Like
Question
Leave us a message in the comments section below if you have any question on this benefit.
Leave a Comment