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How OPM's 40% Rating Cap Works

OPM now caps Level 4 and 5 ratings at 40% of covered employees, down from the 48% who received them last year, and the cap affects awards and RIF standing.

A hand with a stylus ticking boxes on a glowing performance review form with five gold stars above a tablet
40%Cap on Level 4 and Level 5 ratings combined for the fiscal 2026 cycle
48%Employees under five-level systems who got a Level 4 or 5 rating last year (30% plus 18%)
Nov 20OPM's deadline to answer agency requests to exceed the cap

Source: OPM, FY 2026 Standardized Distribution of Rating Levels and FY 2026 Performance Awards Guidance for Federal Employees (September 21, 2026); OPM workforce data.

Who the cap covers

For the fiscal 2026 cycle, no more than 40% of career GS employees, career SES members, and Senior Professionals can receive a Level 4 or Level 5 rating combined. OPM calls it a ceiling, not a target, and no other rating level is capped.

Wage Grade employees, noncareer SES, Schedule C and G appointees, inspector general offices, and very small agencies are excluded. Bargaining units whose contracts bar forced distribution are left out until those contracts end.

Last year, according to OPM data, 30% of employees under five-level systems got Level 5 and 18% got Level 4. The required calibration process will mean lowering many ratings.

What changes for awards

OPM's guidance sets these ranges for GS awards, as a share of basic pay: Level 5 at least 7%, Level 4 at least 4%, and Level 3 no more than 3%, with awards capped at $25,000. At least 60% of each bonus pool should go to Level 4 and 5 performers. Agencies may skip Level 3 awards, and no one rated below Level 3 is eligible for one.

Rating levelFY 2026 GS award range, as a share of basic pay
Level 5, OutstandingAt least 7%
Level 4, Exceeds Fully SuccessfulAt least 4%
Level 3, Fully SuccessfulNo more than 3%, and agencies may skip it
Level 2 or 1No award

Why RIF standing is involved

Under OPM's RIF rules that took effect September 2, an employee's three most recent ratings of record set performance credit: 7 points for Level 5, 5 for Level 4, 3 for Level 3, and 0 for Level 2 or 1. Fewer top ratings means fewer high scores if a RIF happens. FFEBA's RIF, VERA and VSIP guide explains the ranking.

OPM's case and the criticism

OPM says inflated ratings carry no real signal and water down awards for top performers. It points to 2024 FEVS results showing only 47% of employees agreed that differences in performance are recognized in a meaningful way. Director Scott Kupor has written that there is "no shame" in a Fully Successful rating.

NTEU disagrees. After an IRS division acknowledged employees' frustration with the new process and told staff that a Fully Successful rating does not mean mediocre, the union said, "An arbitrary cap on the highest category of ratings undermines morale."

Key dates

Agencies were required to send OPM their closeout parameters, and any request to exceed the cap, by October 30. A waiver can raise the cap by up to 10 percentage points but never above 50% combined, and only for agencies that beat most of their published performance targets. OPM will answer waiver requests by November 20. Agencies report final distributions to OPM in 2027.

  • 1

    October 30

    Agencies send OPM their closeout parameters and any waiver request.

  • 2

    November 20

    OPM answers the waiver requests.

  • 3

    2027

    Agencies report their final rating distributions to OPM.

Frequently Asked Questions

What is OPM's 40% rating cap?

For the fiscal 2026 cycle, no more than 40% of career GS employees, career SES members, and Senior Professionals can receive a Level 4 or Level 5 rating combined. OPM calls it a ceiling, not a target, and no other rating level is capped.

Who is excluded from the cap?

Wage Grade employees, noncareer SES, Schedule C and G appointees, inspector general offices, and very small agencies. Bargaining units whose contracts bar forced distribution are left out until those contracts end.

How do ratings affect RIF standing?

Under OPM's RIF rules that took effect September 2, 2026, an employee's three most recent ratings of record set performance credit: 7 points for Level 5, 5 for Level 4, 3 for Level 3, and 0 for Level 2 or 1.

Can an agency exceed the 40% cap?

Only with a waiver. A waiver can raise the cap by up to 10 percentage points but never above 50% combined, and only for agencies that beat most of their published performance targets. OPM will answer waiver requests by November 20, 2026.

Sources: OPM, Memorandum, FY 2026 Standardized Distribution of Rating Levels and FY 2026 Performance Awards Guidance for Federal Employees (September 21, 2026); OPM, Performance Appraisal for General Schedule, Prevailing Rate, and Certain Other Employees, 91 FR 41521 (July 7, 2026); OPM, Reduction in Force final rule (August 3, 2026); FEDweek (October 27, 2026, and earlier coverage); Government Executive (October 2026).

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