Pay & Benefits of the Military

Table of Contents

Pay

Military Compensation falls into two categories Basic Compensation, and Special Pay and Bonuses.

Basic Pay

Basic Pay is your basic military pay check. It’s taxable, has social security and Medicare taken out of it, and is treated mostly like a paycheck that you’d receive from any private company.

Basic pay changes based on your rank, and the number of years that you’ve served.

This table below shows the salary that an officer can expect for the first few years of service, NOT INCLUDING any annual cost of living/inflation increases, which are normally between 2% – 5% per year.

Rank Years of Service Monthly Pay Annual Pay
2d Lieutenant 0 $3,477 $41,724
1st Lieutenant 2 $4,562 $54,744
Captain 4 $6,185 $74,220
Avg College Graduate 0 $4,605 $55,260

Here is a link to the full 2022 military pay chart. They are adjusted each year.

If an officer is deployed to a hostile combat zone, that entire month’s Basic Pay is tax-free.

Basic Allowance for Housing (BAH)

BAH varies depending on the location where you are stationed, so it is difficult to provide a good estimate of what you can expect to make. BAH is tax-free, and is not included at all on your annual tax return.

There are two different levels of BAH, with and without dependents. If an officer is married and/or has children or another qualifying dependent, then they will receive the ‘with dependent rate’ which is usually several hundred dollars more than without.

Click here to lookup BAH rates by zip code and rank, to get an idea of what the BAH would be where you’d like to live.

The following table shows a few locations so you can get an estimate of the range of BAH.

Location Rank Dependents Monthly BAH Annual BAH
San Francisco, CA 2d Lieutenant (O-1) No $3,894 $46,728
Omaha, NE Captain (O-3) Yes $1,791 $21,492
Tampa, FL Captain (O-3) No $2,364 $28,368
Dayton, OH 1st Lieutenant (O-2) Yes $1,446 $17,352
Washington, DC Captain (O-3) Yes $3,000 $36,000
San Angelo, TX 2d Lieutenant (O-1) No $1,005 $12,060

As you can see, the rate varies considerably, with an O-1 with no dependents in San Francisco, CA making more than twice what an O-3 with dependents makes in Omaha, NE.

Basic Allowance for Subsistence (BAS)

BAS is a tax-free allowance that is meant to cover your food/groceries. It is NOT meant to cover the food/groceries for an entire family, only one person. This is just an amount put into your paycheck every month however, you can spend it as you like.

In 2022, officers make $280.29 per month ($3,363.48 annually), regardless of dependents or rank.

Special Pay and Bonuses

Special pay and bonuses vary depending on assignment location, job, temporary assignment, and other factors. There are over 60 special pays and bonuses.

Some of the most common bonuses are:

  • Aviation Incentive Pay (for Pilots) – $150 – $1,000 per month, depending on years of flying experience
  • Foreign Language Proficiency Bonus (Varies depending on number of language and fluency) – $100 – $500 per month
  • Hardship Duty Pay (When stationed in a remote or dangerous location) – $50 – $150 per month depending on location
  • Family separation pay – Up to $250 per month if you’re separated from your dependents for more than 30 days

  • You can see the rest of the special pay and bonuses information here.

Benefits

TRICARE (Medical Insurance)

Medical care is 100% free for military members. Unless they are stationed far away from a military installation, military members must see the on-base doctor unless given a referral for specialty care off base.

TRICARE offers a couple of plans for families. TRICARE Prime requires family members to see the on-base physician unless given a referral, but there are no co-pays and treatment is 100% free. Any doctor you see other than the military doctor must have a referral first, from the military doctor, which can be a bit of a pain if you regularly go to the doctor.

TRICARE Select offers a much larger choice of off-base providers and you don’t have to get referrals from your primary doctor, but requires an annual $168 deductible per person or $336 per family with a catastrophic cap of $1,120.

If your family is healthy and only goes to the doctor for regular check-ups and minor illnesses, then Prime is probably fine. If you have a dependent with special medical needs, it may be worth paying a little for the flexibility of TRICARE Select, in my opinion.

Retirement

The military retirement plan is called the Blended Retirement System. The government will match up to 5% of your pay and put it into the Thrift Savings Plan, which is similar to a 401k and can be withdrawn when you reach retirement age. You can also easily take out a loan from your own retirement account, with minimal fees and costs.

You can put more than 5% into your TSP, but the government will only match up to 5%. The max you can put into the TSP annually in 2022 is $20,500.

If you reach 20 years of military service, you can retire and receive a pension immediately upon retirement, for 2% of your base pay for each year you’ve served. So if you retire right at 20 years, you’ll receive 40% of the average of your last 3 years’ basic pay for the rest of your life, starting immediately. If you retire after 25 years, you’ll receive 50%, etc.

Leave

Active duty members earn 2.5 days of paid leave per month, for a total of 30 days of paid leave per year. We also get every federal holiday off (mission allowing) and frequently ‘family days’ off around those holidays to turn them into 4-day weekends.

Sick days are unlimited, as long as you’re legitimately sick and not malingering (which is an offense in the Uniform Code of Military Justice).

Servicemembers’ Group Life Insurance (SGLI)

For less than $30 per month, you can have $400,000 of life insurance on yourself, and $100,000 on your spouse.

More info on SGLI.

Death Gratuity, VA Dependency and Indemnity Compensation (DIC)

If you die while on active duty, your spouse and children, or parents, may qualify for various benefits. More info here.

Survivor Benefit Plan (SBP)

More ongoing benefits for your family in the event of your death. More details here.

Tuition Assistance

Officers can receive up to $4,500 ($250 per credit hour) per year to help pay for a master’s degree. Activating this benefit incurs a 2 year Active Duty Service Commitment (ADSC), but it is served concurrently with any other service commitments you have.

Tuition Assistance can be used to attend any accredited school, and for any major that you’re interested in.

GI Bill

The GI Bill is a benefit earned from the VA as a veteran. After three years of service, you’ll earn the full benefit which is worth over $100,000 in tuition, plus you’ll receive BAH for an E-5 while you’re using the benefit.

With certain time-in-service requirements being met, you can also transfer the Post 9/11 GI Bill benefit to your spouse or children, and they’ll receive the full benefit to include the BAH.

More info on the Post 9/11 GI Bill.

Commissary / Base Exchange access

On most bases you’ll have access to the Commissary, which is a grocery store, and the BX, which is kind of like a Wal-Mart. You don’t pay any sales tax at either one, regardless of the state you’re in, though there is a flat rate fee at the commissary added onto what they pay for the items.

The commissary is generally up to 30% cheaper than local grocery stores, though your experience may vary depending on location and global economy.

On base housing

Most bases have family housing for those with dependents. Generally the housing will take all of your BAH, in exchange for a house on base. Utilities are usually included as well, or very cheap. The size of the house will usually depend on rank. Enlisted may have more of a town home, while officers will usually have a free standing single family home.

Child Development Center (CDC)

The CDC on base provides child care, and the cost is adjusted based on your rank. Either way it’ll usually be cheaper than alternatives in town.

Counseling and Assistance Programs

At various base agencies, you can receive free financial counseling, spouse employment counseling, and non-medical mental health counseling. Also, when you leave the service, you’ll go through a two week Transition Assistance class that will help you develop a resume’ and prepare for your next career.

Legal counseling is free through the on-base legal office, where they can help you with a will, notary service, advance medical directives, powers of attorney, and tax return preparation for free.

They cannot represent you in civil court, but may be able to provide some general guidance.

Space Available Travel

If you live close to an AMC hub, you can travel the world extremely cheaply, though the availability of aircraft will depend on USAF missions and maintenance schedules, as well as a prioritized list of passengers.

You can learn more about Space A travel here.

Military Discounts

Many businesses will offer military discounts for active duty members. Could be 10% off of your burrito, 40% off of your favorite clothing, $500 off a car, cheap Disney World tickets, free entrance to Busch Gardens and Sea World every year, etc.

Don’t be afraid to ask if a business offers a military discount, but don’t make a scene if they don’t, either.