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Updated January 19, 2022
Defense Primer: Regular Military Compensation
Congress sets compensation levels for members of the
States, this allowance is known as Basic Allowance for
armed forces through statutory authorizations and
Housing (BAH).
appropriations. When people talk about military pay, they
are often only referring to “basic pay.” Although basic pay
The amount of BAH a servicemember receives is based on
is normally the largest component of cash compensation
three factors: paygrade (rank), geographic location, and
that a servicemember receives, there are other types of
whether the servicemember has dependents. Paygrade and
military pay and allowances that add significantly to it, and
dependency status are used to determine the type of
tax benefits as well. Regular Military Compensation (RMC)
accommodation—or “housing profile”—that would be
is 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 locality. The average costs of
these housing profiles are the basis for BAH rates, with
some additional adjustments made on the basis of paygrade
For 2021, a mid-grade enlisted servicemember (E-5)
(that is, an E-7 without dependents will receive more than
received an annual average of $38,213 in basic pay, but
an E-6 without dependents, even though the appropriate
an average of $68,397 in RMC.
housing profile for both of them is “two bedroom
apartment”). As a result of this methodology, BAH rates are
Regular Military Compensation (RMC)
much higher in some areas than others. The intention is that
RMC, as defined in law, is “the total of the following
servicemembers of similar paygrade and dependency status
are able to pay for roughly comparable housing regardless
elements that a member of the uniformed services accrues
of their duty location. Table 1 provides illustrative
or receives, directly or indirectly, in cash or in kind every
examples of annual BAH.
payday: basic pay, basic allowance for housing, basic
allowance for subsistence, and Federal tax advantage
Basic Allowance for Subsistence
accruing to the aforementioned allowances because they are
Nearly all servicemembers receive a monthly payment to
not subject to Federal income tax.” (37 U.S.C. §101(25))
defray their personal food costs, known as Basic Allowance
Military compensation is structured much differently than
for Subsistence (BAS). BAS is provided at a flat rate. In
civilian compensation, making comparison difficult. RMC
2021, enlisted personnel received $386.50 a month, while
provides a more complete understanding of the cash
officers received $266.18 a month. Those who do not
compensation provided to all servicemembers and therefore
receive BAS—for example, enlisted personnel in basic
is usually preferred over basic pay when comparing military
training—receive government-provided meals.
with civilian compensation, analyzing the standards of
living of military personnel, or studying military
Federal Tax Advantage
compensation trends.
While the various types of military pay—basic pay, special
Basic Pay
pay, and incentive pay—are considered part of gross
For most servicemembers, basic pay is the largest element
income and are usually subject to federal income tax,
of the compensation they receive in their paycheck and
military allowances are generally not subject to federal
typically accounts for about 60% of an individual’s RMC.
income tax. The tax advantage generated by the exemption
All members of the Armed Forces receive basic pay,
of the housing and subsistence allowances from federal
although the amount varies by pay grade (rank) and years of
income tax is a part of RMC. Table 1 provides the
service (also called longevity). Table 1 provides illustrative
estimated tax advantage for the illustrative examples, but
examples of basic pay rates.
the precise value of the federal tax advantage for an
individual servicemember will vary depending on his or her
Basic Allowance for Housing
unique tax situation.
All servicemembers are entitled to either government-
provided housing or a housing allowance. About 34% of
Compensation Elements Not Included in RMC
servicemembers receive government-provided housing (in
Special pays and bonuses, travel reimbursements,
the form of barracks, dormitories, ship berthing, or
educational assistance, deferred compensation (i.e., an
government-owned family housing). The remainder receive
economic valuation of future retired pay and benefits), or
a housing allowance to offset the costs of renting or
any estimate of the cash value of non-monetary benefits
purchasing housing in the civilian economy, or for renting
such as health care, child care, recreational facilities,
privatized housing on-base. For those living in the United
commissaries, and exchanges are excluded from RMC. As
the value of these forms of compensation can be substantial,
https://crsreports.congress.gov
Defense Primer: Regular Military Compensation
RMC should not be considered a measure of total military
compensation.
Table 1. Average Regular Military Compensation for Selected Paygrades
2021 data; assumes al 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)
21,420
15,190
4,638
2,762
44,010
Seaman Recruit (Navy)
Airman Basic (Air Force)
Specialist 1 (Space Force)
E-5
Sergeant (Army and Marine Corps)
38,213
20,555
4,638
4,991
68,397
Petty Officer Second Class (Navy)
Staff Sergeant (Air Force)
Sergeant (Space Force)
E-8
Master Sergeant or First Sergeant (Army
68,156
25,338
4,638
4,454
102,586
and Marine Corps)
Senior Chief Petty Officer (Navy)
Senior Master Sergeant or First Sergeant
(Air Force)
Senior Master Sergeant (Space Force)
O-1
Second Lieutenant (Army, Marine Corps,
41,842
19,071
3,194
4,569
68,676
Air Force and Space Force)
Ensign (Navy)
O-4
Major (Army, Marine Corps, Air Force
97,231
29,300
3,194
8,347
138,072
and Space Force)
Lieutenant Commander (Navy)
O-6
Colonel (Army, Marine Corps, Air Force
143,567
34,035
3,194
10,655
191,451
and Space Force)
Captain (Navy)
Source: Department of Defense, Selected Military Compensation Tables, 1 January 2021, B3, available at
https://militarypay.defense.gov/References/Greenbooks.aspx. Rates rounded to nearest dol ar; rows may not sum exactly due to rounding. E-1
rates exclude E-1s with fewer than four months of service. O-1 rates exclude officers with prior enlisted experience who qualify for the O-1E
rate. 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
Title 37, U.S. Code, Chapter 3—Basic Pay
Other Resources
Title 37, U.S. Code, Chapter 7—Al owances Other Than Travel
and Transportation Allowances
Defense Finance and Accounting Service, 2022 Military Pay
Chart
26 U.S.C. §134 (Exclusion of qualified military benefits from
gross income)
Defense Travel Management Office, BAH Calculator
DOD Financial Management Regulations, Volume 7A, Chapter
1 (Basic Pay), Chapter 25 (Subsistence Allowances), and
Chapter 26 (Housing Allowances).
CRS Products
Military Compensation Background Papers, 8th Edition
CRS Report RL33446, Military Pay: Key Questions and Answers,
by Lawrence Kapp and Barbara Salazar Torreon
Lawrence Kapp, Specialist in Military Manpower Policy
IF10532
https://crsreports.congress.gov
Defense Primer: Regular Military Compensation
Disclaimer
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