Updated December 17, 2018
Defense Primer: Military Pay Raise
The phrase “military pay raise,” frequently used in
How Is the Annual Increase in Basic Pay
discussions of military compensation, almost always refers
Calculated?
to the annual increase in basic pay for members of the
Section 1009 (c) of Title 37 provides a permanent formula
uniformed services. By law, basic pay is automatically
for an automatic annual increase in basic pay that is indexed
increased at the start of each calendar year by an amount
to the annual increase in the ECI for “wages and salaries,
linked to the change in the Employment Cost Index (ECI),
private industry workers.” The automatic adjustment is
although the President or Congress may override this
equal to the increase in the ECI from the third quarter of the
statutory adjustment.
third preceding year to the third quarter of the second
preceding year. For example, in the 12-month period
Pay Raise for 2019
between the quarter that ended in September 2014 and the
quarter that ended in September 2015, the ECI increased by
2.1%. Hence the pay raise for calendar year 2017, as
Basic pay for all servicemembers will increase by 2.6%
calculated by the statutory formula, was 2.1%.
on January 1, 2019.
However, under subsection (e) of this statute, the President
What Is Basic Pay?
can specify an alternative pay adjustment that supersedes
Basic pay is one component of the military compensation
the automatic adjustment. Additionally, Congress may pass
package, which also includes housing, subsistence, health
a law to specify the annual pay raise, superseding the
care, and retirement benefits. For most servicemembers, it
automatic adjustment and/or any presidential adjustment.
is the largest element of the compensation they receive in
Statutory Formula for 2019
their paycheck and typically accounts for about two-thirds
of an individual’s regular military compensation (RMC).
The adjustment in basic pay for calendar year 2019 under
RMC is “the total of the following elements that a member
the statutory formula was 2.6% (reflecting the increase in
of the uniformed services accrues or receives, directly or
the ECI between the third quarter of 2016 and the third
indirectly, in cash or in kind every payday: basic pay, basic
quarter of 2017).
allowance for housing, basic allowance for subsistence, and
Congressional and Presidential Action
Federal tax advantage accruing to the aforementioned
for 2019
allowances because they are not subject to Federal income
tax.” (37 U.S.C. §101(25)).
The FY2019 President’s Budget requested a 2.6% increase
in basic pay, equivalent to the statutory formula. The John
The rate of basic pay an individual receives varies based on
S. McCain National Defense Authorization Act for FY
his or her paygrade (rank) and years of military service. For
2019 (P.L. 115-232) contained no provision relating to a
example, a newly enlisted recruit (paygrade E-1) with four
general increase in basic pay and thereby left the automatic
or more months of service and less than two years of
adjustment of 37 U.S.C. 1009 in place. According to the
service receives $1,680.90 in basic pay per month in 2019,
conference report that accompanied the NDAA, “The
while a more senior enlisted person (paygrade E-6) with
conferees note that current law authorizes automatic
between 10 and 12 years of service receives $3,656.40 per
military pay raises consistent with the Economic Cost
month. A newly joined officer (paygrade O-1) with less
Index, which for calendar year 2019 amounts to a 2.6
than two years of service receives $3,188.50 in basic pay
percent raise in basic pay for all members of the uniformed
per month in 2019, while a more senior officer (paygrade
services.”
O-4) with between 10 and 12 years of service receives
Statutory Formula for 2020
$7,236.10 per month.
The adjustment in basic pay for calendar year 2020 under
Pay tables are available at http://www.dfas.mil/
the statutory formula is 3.1% (reflecting the increase in the
militarymembers/payentitlements/military-pay-charts.html.
ECI between the third quarter of 2017 and the third quarter
of 2018). The actual increase in basic pay for 2020 may be
different, depending on presidential or congressional action.
https://crsreports.congress.gov

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Defense Primer: Military Pay Raise
Table 1. Historical Increases in Basic Pay
Pay raise figures do not include targeted increases (“pay table reform,” or PTR), which are discussed in comment column
Calendar
Year in
Provision
Which Pay
Enacted
Raise Was
Statutory
Increase
Budget
into Law
Increase in
Effective
Formula
in ECI
Request
PAA
(NDAA)
Basic Pay
Comments
PTR: Additional increases for midgrade
2001
=ECI +0.5%
3.2%
3.7%
n.a.
3.7%+PTR
3.7%+PTR
enlisted.
PTR: Additional increases for most
servicemembers, but focused on midgrade
2002
=ECI +0.5%
4.1%
5.0%+PTR
n.a.
5.0%+PTR
5.0%+PTR
and senior enlisted members, midgrade
officers and some warrant officers.
PTR: Additional increases for midgrade and
2003
=ECI +0.5%
3.6%
4.1%+PTR
n.a.
4.1%+PTR
4.1%+PTR
senior enlisted, midgrade officers, and some
warrant officers.
PTR: Additional increases for midgrade and
2004
=ECI +0.5%
3.2%
2.0%+PTR
n.a.
3.7%+PTR
3.7%+PTR
senior enlisted, and some warrant officers.
2005
=ECI +0.5%
3.0%
3.5%
n.a.
3.5%
3.5%

2006
=ECI +0.5%
2.6%
3.1%
n.a.
3.1%
3.1%

PTR: Additional increases for midgrade
2007
= ECI
2.2%
2.2%
n.a.
2.2%+PTR
2.2%+PTR
enlisted and some warrant officers; pay table
extended to 40 years of service.
2008
= ECI
3.0%
3.0%
n.a.
3.5%
3.5%

2009
= ECI
3.4%
3.4%
n.a.
3.9%
3.9%

2010
= ECI
2.9%
2.9%
n.a.
3.4%
3.4%

2011
= ECI
1.4%
1.4%
n.a.
NGP
1.4%

2012
= ECI
1.6%
1.6%
n.a.
NGP
1.6%

2013
= ECI
1.7%
1.7%
n.a.
1.7%
1.7%

2014
= ECI
1.8%
1.0%
1.0%
NGP
1.0%

2015
= ECI
1.8%
1.0%
1.0%
NGP
1.0%
No increase for paygrades O-7 and higher.
2016
= ECI
2.3%
1.3%
1.3%
NGP
1.3%
No increase for paygrades O-7 and higher.
2017
=ECI
2.1%
1.6%
1.6%
2.1%
2.1%

2018
=ECI
2.4%
2.1%
2.1%
2.4%
2.4%

2019
=ECI
2.6%
2.6%
n.a.
NGP
2.6%

2020
=ECI
3.1%





Source: Statutory formula from 37 U.S.C. 1009; increase in ECI from Bureau of Labor Statistics; presidential alternative adjustment from
presidential notification to Congress; provision enacted into law from relevant NDAA.
Notes: PAA= presidential alternative adjustment; PTR = pay table reform (targeted changes in certain cells of the pay table, thereby giving
certain groups higher pay raises than provided by the general increase); NGP = no general statutory provision; n.a. = not applicable.


IF10260
Lawrence Kapp, Specialist in Military Manpower Policy

https://crsreports.congress.gov

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Defense Primer: Military Pay Raise



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https://crsreports.congress.gov | IF10260 · VERSION 15 · UPDATED

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