Locality adjustments are paid within each area determined to have a Federal - non-Federal pay disparity greater than 5%. There currently are 32 locality pay areas, including a Rest of U.S. area. It applies to GS employees in the continental United States (CONUS) only. It does not cover employees overseas.
Employees entitled to a higher rate of basic pay than the locality rate for their area receive the higher rate. For example, special salary rates may apply to occupations for which the Army has a difficult time recruiting candidates and retaining employees, and the Government pays these employees a higher rate than is paid to other GS employees at their grade and step.
Locality pay is considered in applying various pay-setting rules (including maximum payable rate, promotion, transfer, and pay retention) and in computing hiring and retention incentives and rating-based awards expressed as a percentage of pay.