Defense Primer: Military Pay Raise

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Updated December 30, 2024

Defense Primer: Military Pay Raise

The phrase “military pay raise,” frequently used in discussions of military compensation, almost always refers to the annual increase in basic pay for members of the uniformed services. By law, basic pay is automatically increased at the start of each calendar year by an amount linked to the change in the Employment Cost Index (ECI), although the President or Congress may override this statutory adjustment.

Pay Raise for 2025

What Is Basic Pay?

Basic pay is one component of the military compensation package, which also includes housing, subsistence, health care, and retirement benefits. For most servicemembers, it is the largest element of the compensation they receive in their paycheck and typically accounts for about three-fifths of an individual’s regular military compensation (RMC). RMC is “the total of the following elements that a member of the uniformed services accrues or receives, directly or indirectly, in cash or in kind every payday: basic pay, basic allowance for housing, basic allowance for subsistence, and Federal tax advantage accruing to the aforementioned allowances because they are not subject to Federal income tax.” (37 U.S.C. §101(25)). (See CRS In Focus IF10532, Defense Primer: Regular Military Compensation.)

The rate of basic pay an individual receives varies based on his or her paygrade (rank) and years of military service. For example, in 2024, a newly enlisted recruit (paygrade E-1) with four or more months of service and less than two years of service received $2,017.20 in basic pay per month, while a more senior enlisted person (paygrade E-6) with between 10 and 12 years of service received $4,387.80 per month. A newly commissioned officer (paygrade O-1) with less than two years of service received $3,826.20 in basic pay per month in 2024, while a more senior officer (paygrade O-4) with between 10 and 12 years of service received $8,684.10 per month.

Pay tables are available at https://www.dfas.mil/ militarymembers/payentitlements/Pay-Tables.

How Is the Annual Increase in Basic Pay Calculated?

Section 1009(c) of Title 37, United States Code provides a permanent formula for an automatic annual increase in basic pay that is indexed to the annual increase in the ECI for “wages and salaries, private industry workers.” The automatic adjustment is equal to the increase in the ECI from the third quarter of the third preceding year to the third quarter of the second preceding year. For example, in the 12-month period between the quarter that ended in September 2021 and the quarter that ended in September 2022, the ECI increased by 5.2%. Hence, the pay raise for calendar year 2024, as calculated by the statutory formula, was 5.2%.

However, under subsection (e) of this statute, the President can specify an alternative pay adjustment that supersedes the automatic adjustment. Additionally, Congress may pass a law to specify the annual pay raise, superseding the automatic adjustment and/or any presidential adjustment.

Statutory Formula for 2025

The adjustment in basic pay for calendar year 2025 under the statutory formula is 4.5% (reflecting the increase in the ECI between the third quarter of 2022 and the third quarter of 2023). The 4.5% statutory pay raise is therefore, effective on January 1, 2025.

Congressional and Presidential Action for 2025

The FY2025 President’s Budget requested a 4.5% increase in basic pay, equivalent to the statutory formula. The enacted Servicemember Quality of Life Improvement and National Defense Authorization Act for Fiscal Year 2025, (FY2025 NDAA, P.L. 118-159) included an additional pay table increase of 10.5% for junior servicemembers in the grades of E-1 through E-4 with smaller increases for servicemembers in grade E-5 with fewer than ten years of service. This additional pay raise is authorized to become effective until April 1, 2025.

The adjustment in basic pay for 2025 under the statutory formula is 4.5%, effective January 1, 2025. Congress enacted additional pay table increases for junior servicemembers to take effect on April 1, 2025.

Defense Primer: Military Pay Raise

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Table 1. Historical Increases in Basic Pay

Pay raise figures do not include targeted increases (“pay table reform,” or PTR), which are discussed in the comments column

Calendar

Year in

Which Pay

Raise Was

Effective

Statutory

Formula

Increase

in ECI

Budget

Request PAA

Provision

Enacted

into Law (NDAA)

Increase in

Basic Pay Comments

2004 = ECI +0.5% 3.2% 2.0%+PTR n.a. 3.7%+PTR 3.7%+PTR PTR: Additional increases for midgrade and 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%

2007 = ECI 2.2% 2.2% n.a. 2.2%+PTR 2.2%+PTR

PTR: Additional increases for midgrade 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% 3.1% n.a. 3.1% 3.1%

2021 = ECI 3.0% 3.0% n.a. 3.0% 3.0%

2022 = ECI 2.7% 2.7% n.a. NGP 2.7%

2023 = ECI 4.6% 4.6% n.a. NGP 4.6%

2024 = ECI 5.2% 5.2% n.a. NGP 5.2%

2025 = ECI 4.5% 4.5% n.a 4.5%+PTR 4.5%+PTR PTR: Additional increases for junior enlisted, effective April 1, 2025.

Sources: 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.

Kristy N. Kamarck, Specialist in Military Personnel

IF10260

Defense Primer: Military Pay Raise

https://crsreports.congress.gov | IF10260 · VERSION 26 · UPDATED

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