Military Pay Chart – Do you know that the system of military compensation, which includes pay and allowances, has about 70 different types within? The number seems so overwhelming and it is indeed confusing, even for some of the military members themselves. To help you understand it better, you may use a military pay chart, a tool that explains the basic pay of military members according to several affecting factors.
Regardless of the complexity of the military pay system; it will be beneficial for the families of military members to fathom how it works. This might be helpful to plan and make sound decisions financially. In this article, you will read about some of the most common types, influential factors, and tax implications of military pay.
Military Pay Types
As mentioned above, there are so many available types within the military compensation system. If you look at the military pay chart, you will be shown the amount of basic pay, which is the primary component of the military members’ salary and is received by them all. There are also special and incentive pays, which typically are reserved for certain events or qualifications. An example of this is the pay received by parachutists and aviators due to their hardship or live-challenging duties.
On the other hand, there is also allowance, which is different from pay. Allowances are payments received by military members for certain needs, such as housing or food. They are given when certain needs cannot be provided by the government. As an example, when the number of houses for military members from the government is not adequate, then they’ll receive housing allowances. The purpose of providing housing allowances is to help the members to acquire commercial housing.
Some of the common types of military allowances are Basic Allowance for Housing (BAH) and Basic Allowance for Subsistence (BAS). Most of the members receive these two types of allowances and the amount of these usually makes up a notable part of their total pay. Nearly all types of allowance aren’t considered as taxable income.
Factors That Influence Military Pay
Similar to other job fields out there, the military also provides different pay for its force – as shown by the military pay chart.
Here are several things that may affect the pay:
- Pay raise rate every year
- Years of service (2-year interval between each category)
- Location (for BAH and BAS)
- Special pay received
The amount of basic pay on the military pay chart is adjusted each year based on the Employment Cost Index (ECI). ECI is an indicator that’s published every quarter of the year, and it calculates the changes in labor price (hourly employee compensation). The military pay raise rate is adjusted using ECI that’s released in September.
The use of ECI begins in 2003 when the U.S. Congress passed a law that order the ECI index to be used as the basis for annual military pay rate raise.
Tax Implications for Military Pay
The tax implication for numerous types of pays and allowances of military members are quite complicated. There are several compensations that are considered as taxable income while some others aren’t.
The general guideline is by looking at the title to determine if the compensation type is taxable or not. If the title contains the ‘pay’ word, such as basic pay, then it is most likely categorized under taxable income, with certain exceptions. On the contrary, if the title contains ‘allowance’ words, such as Basic Allowance for Subsistence (BAS), then it is most likely classified under non-taxable income.
For the full military pay chart table with the most updated adjustment, you can check it on the U.S. Defense Finance and Accounting Service (https://www.dfas.mil/). The website provides you with complete resources of military pay information reference.
Here is a list of military pay raise throughout history, organized by year.
|YEAR||MILITARY PAY RAISE %|
2022 Military Pay Chart 2.7% (All Pay Grades)