Military pay is a critical aspect of compensation for service members. However, understanding military pay can be daunting and feel overcomplicated. We’re breaking down military pay and the different factors that make up total compensation for service members.
What’s Included In Military Pay?
At the core of military compensation is basic pay, which serves as the foundation of a service member’s earnings. Basic pay is determined by rank and years of service, with higher ranks and longer tenures being directly related to increased pay. Military pay scales are publicly available and are regularly updated to reflect changes in cost of living and legislation. You can view the most current pay chart here. You’ll see this has changed quite a bit since 2022.
Military Pay Allowances
In addition to basic pay, service members receive various allowances to offset expenses incurred during their service. These allowances include the following:
Housing Allowance (BAH): BAH is provided to service members who are not provided government housing. The amount is based on location, rank, and dependency status, aiming to cover housing costs in the civilian community. To view current housing rates click here.
Subsistence Allowance (BAS): BAS is designed to offset the cost of food for service members. Unlike BAH, BAS is not affected by location and is provided at a flat rate. The 2024 rate for BAS is $316.98 for Officers and $460.25 for Enlisted per month.
Cost of Living Allowance (COLA): COLA is provided to service members stationed in high-cost areas outside the continental United States, aiming to maintain purchasing power comparable to living in the continental U.S.
Service members may be eligible for special pays and incentives based on their skills, duties, or assignments. Examples include hazardous duty pay, combat pay, and reenlistment bonuses.
Bonuses and Special Compensation: Service members may also receive bonuses and special compensation for certain skills, assignments, or circumstances. These include:
Signing Bonuses: Offered to individuals who enlist or reenlist in critical occupations or during times of manpower shortage.
Career Field Bonuses: Service members in specific career fields may receive bonuses to incentivize retention or fill critical skill gaps.
Special Duty Assignment Pay (SDAP): SDAP is provided to service members who perform duties designated as unusually demanding or requiring special qualifications.
Military Pay & Taxes
While military pay is generally not subject to state income taxes in some states, federal income taxes still apply. Additionally, service members may have deductions for various benefits and services, such as:
Thrift Savings Plan (TSP) Contributions: Similar to a civilian 401(k), service members can contribute to their TSP to save for retirement.
Servicemembers Group Life Insurance (SGLI): Service members have the option to enroll in life insurance coverage through SGLI, with premiums deducted from their pay.
Uniform Allowance: Some service branches provide an annual allowance to assist with the cost of purchasing and maintaining uniforms.
The Bottom Line
Understanding military pay is essential for service members to manage their finances effectively and maximize their compensation. While the system may seem complex, taking the time to understand total compensation is in your best interest. Learning the system empowers you to ensure you make the most of the resources available to you, and receive fair compensation for your dedication and sacrifice to our country.
