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Updated December 17, 2018
Defense Primer: Regular Military Compensation
Congress sets compensation levels for members of the
a housing allowance to offset the costs of the housing they
armed forces through statutory authorizations and
rent or purchase in the civilian economy. For those living in
appropriations.
the United States, this allowance is known as Basic
Allowance for Housing (BAH).
When people talk about military pay, they are often only
referring to “basic pay.” Although basic pay is normally the
The amount of BAH a servicemember receives is based on
largest component of cash compensation that a
three factors: paygrade (rank), geographic location, and
servicemember receives, there are other types of military
whether the servicemember has dependents. Paygrade and
pay and allowances that add significantly to it, and tax
dependency status are used to determine the type of
benefits as well. Regular Military Compensation (RMC) is
accommodation—or “housing profile”—that would be
a statutorily defined measure of the cash or in-kind
appropriate for the servicemember (for example, one-
compensation elements which all servicemembers receive
bedroom apartment, two-bedroom townhouse, or three-
every payday. It is widely used as a basic measure of
bedroom single family home). Geographic location is used
military cash compensation levels and for comparisons with
to determine the average costs associated with each of these
civilian salary levels.
housing profiles in a given locaity. The average 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
For 2018, a mid-grade enlisted servicemember (E-5)
an E-6 without dependents, even though the appropriate
received an annual average of $35,169 in basic pay, but
housing profile for both of them is “two bedroom
an average of $63,423 in RMC.
apartment”). As a result of this methodology, BAH rates are
much higher in some areas than others. The intention is that
servicemembers of similar paygrade and dependents status
Regular Military Compensation (RMC)
are able to pay for roughly comparable housing regardless
RMC, as defined in law, is “the total of the following
of their duty location. Table 1 provides illustrative
elements that a member of the uniformed services accrues
examples of annual BAH.
or receives, directly or indirectly, in cash or in kind every
Basic Allowance for Subsistence
payday: basic pay, basic allowance for housing, basic
allowance for subsistence, and federal tax advantage
Nearly all servicemembers receive a monthly payment to
accruing to the aforementioned allowances because they are
defray their personal food costs, known as Basic Allowance
not subject to federal income tax.” Military compensation is
for Subsistence (BAS). BAS is provided at a flat rate. In
structured much differently than civilian compensation,
2018, enlisted personnel received $369.39 a month, while
making comparison difficult. RMC provides a more
officers received $254.39 a month. Those who do not
complete understanding of the cash compensation provided
receive BAS—for example, enlisted personnel in basic
to all servicemembers and therefore is usually preferred
training—receive government-provided meals.
over simple basic pay when comparing military with
Federal Tax Advantage
civilian compensation, analyzing the standards of living of
military personnel, or studying military compensation
While the various types of military pay—basic pay, special
trends over time.
pay, and incentive pay—are considered part of gross
income and are usually subject to federal income tax,
Basic Pay
military allowances are generally not subject to federal
For most servicemembers, basic pay is the largest element
income tax. The tax advantage generated by the exemption
of the compensation they receive in their paycheck and
of the housing and subsistence allowances from federal
typically accounts for about two-thirds of an individual’s
income tax is a part of RMC. Table 1 provides the
RMC. All members of the Armed Forces receive basic pay,
estimated tax advantage for the illustrative examples, but
although the amount varies by pay grade (rank) and years of
the precise value of the federal tax advantage for an
service (also called longevity). Table 1 provides illustrative
individual servicemember will vary depending on his or her
examples of basic pay rates.
unique tax situation.
Basic Allowance for Housing
Compensation Elements Not Included in RMC
All servicemembers are entitled to either government-
Special pays and bonuses, travel reimbursements,
provided housing or a housing allowance. About 40% of
educational assistance, deferred compensation (i.e., an
servicemembers receive government-provided housing (in
economic valuation of future retired pay and benefits), or
the form of barracks, dormitories, ship berthing, or
any estimate of the cash value of non-monetary benefits
government-owned family housing). The remainder receive
such as health care, child care, recreational facilities,
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Defense Primer: Regular Military Compensation
commissaries, and exchanges are excluded from RMC. As
the value of these forms of compensation can be substantial,
RMC should not be considered a measure of total military
compensation.
Table 1. Average Regular Military Compensation for Selected Paygrades
2018 data; assumes all cash pay (e.g., BAH instead of government quarters)
Estimated
Average
Average
Average
Annual
Average
Annual
Annual
Federal
Average
Pay
Annual
Housing
Subsistence
Tax
Annual
Grade
Rank
Basic Pay
Allowance
Allowance
Advantage
RMC
E-1
Private (Army and Marine Corps) Seaman
$19,660
$14,321
$4,433
$2,597
$41,011
Recruit (Navy)
Airman Basic (Air Force)
E-5
Sergeant (Army and Marine Corps)
$35,169
$19,019
$4,433
$4,802
$63,423
Petty Officer Second Class (Navy)
Staff Sergeant (Air Force)
E-8
Master Sergeant or First Sergeant (Army
$63,095
$23,579
$4,433
$4,136
$95,243
and Marine Corps)
Senior Chief Petty Officer (Navy)
Senior Master Sergeant or First Sergeant
(Air Force)
O-1
Second Lieutenant (Army, Air Force and
$38,890
$17,563
$3,053
$4,105
$63,611
Marine Corps)
Ensign (Navy)
O-4
Major (Army, Air Force and Marine
$89,866
$27,691
$3,053
$7,526
$128,135
Corps)
Lieutenant Commander (Navy)
O-6
Colonel (Army, Air Force and Marine
$131,887
$32,039
$3,053
$10,012
$176,991
Corps)
Captain (Navy)
Source: Department of Defense, Selected Military Compensation Tables, 1 January 2018, B3, available at
https://militarypay.defense.gov/Portals/3/Documents/Reports/GreenBook%202018.pdf?ver=2018-01-16-123652-020. Note that this publication
computes the estimated average annual federal tax advantage using the standard deduction and 2011 tax rates, including earned income tax
credit. The actual annual tax advantage of servicemembers will vary based on their unique tax situation.
Relevant Statutes
Other Resources
Title 37, U.S. Code, Chapter 3—Basic Pay
Defense Finance and Accounting Service, 2018 Military Pay
Title 37, U.S. Code, Chapter 7—Allowances
Chart
26 U.S.C. §134 (Exclusion of qualified military benefits from
Defense Travel Management Office, BAH Calculator
gross income)
DOD Financial Management Regulations, Volume 7A, Chapter
1 (Basic Pay) and Chapter 25 (Subsistence Allowances).
Joint Travel Regulations, Chapter 10 (Housing Allowances)
Military Compensation Background Papers, 7th Edition
CRS Products
CRS Report RL33446, Military Pay: Key Questions and Answers,
by Lawrence Kapp and Barbara Salazar Torreon
Lawrence Kapp, Specialist in Military Manpower Policy
IF10532
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Defense Primer: Regular Military Compensation
Disclaimer
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