Under limited circumstances, servicemembers may receive a cash payment in lieu of their unused leave see 37 U. Servicemembers normally pay the costs for this coverage, but the government reimburses the premiums for those serving in an assignment outside the United States or its possessions in support of a contingency operation in an area that "has been designated a combat zone" or "is in direct support of an area that has been designated a combat zone" 37 U.
Subsidized grocery stores on military bases around the world. Retail stores furniture, electronics, clothing, jewelry, etc. They do not receive direct subsidies like commissaries, but do receive some indirect subsidies in the form of waived or reduced costs for utilities, rent, and base services.
Source: Congressional Research Service compilation from statutory authorities, Military Compensation Background Papers , government websites, and other data. For most servicemembers, basic pay is the largest element of the compensation they receive in their paycheck and typically accounts for about two-thirds of an individual's RMC.
All members of the Armed Forces receive basic pay, although the amount varies by pay grade rank and years of service also called longevity. Table 2 provides illustrative examples of basic pay rates. All servicemembers are entitled to either government-provided housing or a housing allowance, known as basic allowance for housing BAH for those living within the United States or Overseas Housing Allowance OHA for those living outside of the United States.
Roughly one-third of servicemembers receive government-provided housing in the form of barracks, dormitories, ship berthing, or government-owned family housing , with the remainder receiving BAH or OHA to offset the costs of the housing they rent or purchase in the civilian economy or the privatized housing they rent on or near military bases.
The proportion of housing costs covered by housing allowances has varied over time. The amount of BAH a servicemember receives is based on three factors: paygrade rank , geographic location, and whether the servicemember has dependents.
Geographic location is used to determine the median costs 10 associated with each of these housing profiles. The median costs of these housing profiles are the basis for BAH rates, with some additional adjustments made on the basis of paygrade that is, an E-7 without dependents will receive more than an E-6 without dependents, even though the appropriate housing profile for both of them is "two bedroom apartment". As a result of this methodology, BAH rates are much higher in some areas than others, but servicemembers of similar paygrade and dependents status should be able to pay for roughly comparable housing regardless of their duty location.
Table 2 provides illustrative examples of how much BAH servicemembers receive annually. OHA is also based on paygrade, geographic location, and whether the servicemember has dependents, but the manner in which it is calculated is significantly different than BAH. The amount is reduced if the servicemember resides with one or more "sharers. Nearly all servicemembers receive a monthly payment to defray their personal food costs. Table 2.
The tax advantage is computed "using the standard deduction and tax rates, including the earned income tax credit. Certain types of military compensation are not subject to federal income tax, thus generating a tax benefit for servicemembers. The various types of military pay—basic pay, special pay, and incentive pay—are considered part of gross income and are usually subject to federal income tax.
The precise value of the federal tax advantage for an individual servicemember will vary depending on his or her unique tax situation. RMC does not include the full array of compensation elements e.
As the value of these forms of compensation can be very substantial, RMC should not be considered a measure of total military compensation. Mentions of the "military pay raise" are almost always references to the annual increase in basic pay. The statutory formula for calculating each year's pay raise is discussed below, but b asic pay is only one element of RMC.
BAH and BAS are also subject to periodic adjustment, although they typically do not receive as much attention as increases in basic pay. Section of Title 37 provides a permanent formula for an automatic annual increase in basic pay that is indexed to the annual increase in the Employment Cost Index ECI for "wages and salaries, private industry workers.
For and onward, the statute required the raise be equal to the ECI, although Congress continued to enact increases above the ECI through Under subsection e of this statute, the President can specify an alternative pay adjustment that supersedes the automatic adjustment.
President Obama invoked this option with regard to the pay raises. The frequency of such congressional action is discussed below. The automatic adjustment under 37 U. For example, in the month period between the quarter which ended in September and the quarter which ended in September , the ECI increased by 2. Hence the pay raise for , as calculated by the statutory formula, was 2. An illustration of how the formula operates is provided in Figure 1.
This methodology results in a substantial lag between increases in the ECI and increases in basic pay; the lag appears to be related to the stages of the federal budget process. Figure 1. Despite the statutory formula, which could operate each year without any further action, Congress has frequently waived the automatic adjustment and legislated particular percentage increases.
For the pay raises effective in fiscal years and and calendar years , , and 20 Congress specified the increase that was to take effect in the annual defense authorization act. Congress specified no percentage increase for , , , , 21 or , thereby allowing the statutory formula or the presidential alternative adjustment to go into effect. The statutory formula is important even when it does not go into effect, as it provides a benchmark around which alternatives are developed and debated.
Basic Allowance for Housing is paid to servicemembers living in the United States who do not choose or are not provided government quarters. However, the law requires the Secretary to set the rates "based on the costs of adequate housing determined for the area" and ties this determination to "the costs of adequate housing for civilians with comparable income levels in the same area. Thus, the average increase in BAH almost always differs from the increase in basic pay.
Costs for utilities are also collected. If costs in a given MHA increase, it adjusts BAH rates for that locality upward accordingly at the start of the next calendar year. However, in the case of a downward adjustment, a "save pay" provision on the BAH statute prevents the decrease from applying to individuals currently assigned to that locality: "So long as a member of a uniformed service retains uninterrupted eligibility to receive a basic allowance for housing within an area of the United States, the monthly amount of the allowance for the member may not be reduced as a result of changes in housing costs in the area or the promotion of the member.
BAS is paid at a uniform rate to all eligible enlisted personnel, and at a uniform but lower rate for all eligible officers. By law, BAS is adjusted each year according to a formula that is linked to changes in food prices. The increase is identical to "the percentage increase in the monthly cost of a liberal food plan for a male in the United States who is between 20 and 50 years of age over the preceding fiscal year, as determined by the Secretary of Agriculture each October 1.
The following subsections itemize action on the basic pay increase going back to Unless otherwise noted, all increases were proposed to be effective on January 1 of the year indicated in bold. The public law number for each year's National Defense Authorization Act is included at the end of each section below, even for those years in which there was no statutory language relevant to the pay raise.
Statutory Formula: 2. Administration request: 2. The John S. Final increase: 2. On August 31, , President Trump sent a letter to congressional leaders invoking his authority under 37 U. Therefore, basic pay for all servicemembers increased by 2. Final increase : 2. Administration request: 1.
On August 31, , the President sent a letter to congressional leaders invoking his authority under 37 U. This statutory adjustment supplanted the President's alternative pay adjustment.
The Senate version H. On August 28, the President exercised his authority to specify an alternative adjustment, setting the increase at 1. No general pay raise provision was included in the final version of the NDAA, thereby leaving in place the 1. Final increase : 1. Statutory Formula: 1. The House version of the FY NDAA contained no statutory provision to specify the rate of increase in basic pay, although the report accompanying it stated that the committee supported a 1.
The Senate committee-reported version contained a provision waiving the automatic adjustment of 37 U. The House version of the FY NDAA contained no provision to specify the rate of increase in basic pay, while the Senate committee-reported bill specified an increase of 1. No provision was included in the final version of the NDAA, thereby leaving in place the 1. The Senate bill contained no statutory language.
The final bill specified a 1. Both the Senate-reported bill and the final version were silent on the pay raise issue. As a result, the statutory formula became operative with an automatic January 1, , across-the-board raise equal to 1. Statutory formula: 1. Administration request : 1.
Both the Senate-reported bill and the final bill were silent on the pay raise issue. As a result, the statutory formula became operative with an automatic across-the-board raise of 1.
Statutory formula: 2. Final increase : 3. Statutory formula: 3. Administration request: 3. The final version of the NDAA, signed into law on January 28, specified that basic pay be increased by 3. Basic pay rates are calculated monthly, rather than weekly or bimonthly, and are subject to taxes like civilian pay.
Basic pay rates are automatically adjusted according to the annual Employment Cost Index , which compares military pay with growth in private sector wages. Additional pay raises above the ECI adjustment may be approved and funded by Congress. This allowance is meant to offset the cost of housing. To begin, select your options from the drop-down menus below.
Then adjust the slider at the bottom of the tool to see how compensation changes over time. Military salaries come from two sources: base pay and special pays. Base pay is the same across all Service branches, and increases are based on rank and time in the Service. The base pay featured here is estimated based on the military average across all Service branches. Special pays are provided for some service members based on occupational specialty or specific tasks performed.
Service members may earn no more than two special pays simultaneously. When serving in the Reserve or Guard, you receive base pay for the time you spend in basic training or active duty e. You also receive drill pay for your inactive duty time, such as training weekends. A majority of the force receives both of these allowances and, in many cases, these allowances comprise a significant portion of the member's total pay. Skip to main content Press Enter.
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