CFR > Title 5 - Administrative Personnel > CHAPTER XCIX—DEPARTMENT OF DEFENSE HUMAN RESOURCES MANAGEMENT AND LABOR RELATIONS SYSTEMS (DEPARTMENT OF DEFENSE—OFFICE OF PERSONNEL MANAGEMENT) > PART 9901—DEPARTMENT OF DEFENSE NATIONAL SECURITY PERSONNEL SYSTEM (NSPS) > SUBPART C—Pay and Pay Administration (§9901.301 to §9901.372) > 9901.331—General.

9901.331—General.

(a) Introduction. The base salary ranges established under §§ 9901.321 through 9901.322 may be supplemented in appropriate circumstances by local market supplements, as described in this section. These supplements are set and adjusted as described in § 9901.333. The sum of an employee's base salary plus any applicable local market supplement constitutes the employee's adjusted salary.
(b) Computation. Standard local market supplements are computed by multiplying the applicable supplement percentage rate times the employee's base salary rate and rounding the result to the nearest whole dollar. Targeted local market supplements are computed by multiplying the applicable supplement percentage rate times the employee's base salary rate and rounding the result to the nearest whole dollar, or by inclusion of the applicable supplement constant whole dollar amount for eligible employees. A local market supplement is payable only to the extent that it does not cause an employee's adjusted salary rate to exceed the rate limitation described in § 9901.312(b).
(c) Official worksite. When a local market supplement is linked to a geographic area, the employee's entitlement to the local market supplement is contingent on the employee's official worksite (as defined in 5 CFR 531.605) being located in that geographic area.
(d) Treatment as basic pay. Local market supplements are considered basic pay only for the following purposes:
(1) Retirement deductions, contributions, and benefits under 5 U.S.C. chapter 83 or 84;
(2) Life insurance premiums and benefits under 5 U.S.C. chapter 87;
(3) Premium pay under 5 U.S.C. chapter 55, subchapter V, or similar payments under other legal authority, including this subpart;
(4) Severance pay under 5 U.S.C. 5595 ;
(5) Cost-of-living allowances and post differentials under 5 U.S.C. 5941 ;
(6) Overseas allowances and differentials under 5 U.S.C. chapter 59, subchapter III, to the extent authorized by the Department of State;
(7) Recruitment, relocation, and retention incentives, supervisory differentials, and extended assignment incentives under 5 U.S.C. chapter 57, subchapter IV, and 5 CFR part 575 ;
(8) Lump-sum payments for accumulated and accrued annual leave under 5 CFR 550, subpart L;
(9) Determining whether an employee's rate of basic pay is reduced at the point of conversion or movement into or out of the NSPS pay system for the purpose of applying 5 U.S.C. chapter 75, subchapter II (dealing with adverse actions), consistent with §§ 9901.351(g), 9901.371(d), and 9901.372(f) ;
(10) Other payments and adjustments under other statutory or regulatory authority for which locality-based comparability payments under 5 U.S.C. 5304 are considered part of basic pay; and
(11) Any other provisions for which DoD local market supplements are expressly treated as basic pay by law or under this part.