Defense Primer: Regular Military Compensation

https://crsreports.congress.gov

Updated November 21, 2024

Defense Primer: Regular Military Compensation

Congress sets compensation levels for members of the Armed Forces through statutory authorizations and appropriations. When people talk about military pay, they are often only referring to “basic pay.” Although basic pay is normally the largest component of cash compensation that a servicemember receives, there are other types of military pay, allowances, and tax benefits that add significantly to it. Regular Military Compensation (RMC) is a statutorily defined measure of the cash or in-kind compensation elements which all servicemembers receive every payday. It is widely used as a basic measure of military cash compensation levels and for comparisons with civilian salary levels.

Regular Military Compensation (RMC)

RMC, as defined in law, 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)) Military compensation is structured much differently than civilian compensation, making comparison difficult. RMC provides a more complete understanding of the cash compensation provided to all servicemembers and therefore is usually preferred over basic pay when comparing military with civilian compensation, analyzing the standards of living of military personnel, or studying military compensation trends.

Basic Pay For most servicemembers, basic pay is the largest element of the compensation they receive in their paycheck and typically accounts for about 60% of an individual’s RMC. All members of the Armed Forces receive basic pay, although the amount varies by pay grade (rank) and years of service (also called longevity). Table 1 provides illustrative examples of basic pay rates.

Basic Allowance for Housing All servicemembers are entitled to either government- provided housing or a housing allowance. About 33% of servicemembers receive government-provided housing (in the form of barracks, dormitories, ship berthing, or government-owned family housing). The remainder receive a housing allowance to offset the costs of renting or purchasing housing in the civilian economy, or for renting privatized housing on-base. For those living in the United

States, this allowance is known as Basic Allowance for Housing (BAH).

The amount of BAH a servicemember receives is based on three factors: paygrade (rank), geographic location, and whether the servicemember has dependents. Paygrade and dependency status are used to determine the type of accommodation—or “housing profile”—that would be appropriate for the servicemember (for example, one- bedroom apartment, two-bedroom townhouse, or three- bedroom single family home). Geographic location is used to determine the average costs associated with each of these housing profiles in a given locality. The median 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 an E-6 without dependents, even though the appropriate housing profile for both of them is “two bedroom 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 dependency status are able to pay for roughly comparable housing regardless of their duty location. Table 1 provides illustrative examples of annual BAH.

Basic Allowance for Subsistence Nearly all servicemembers receive a monthly payment to defray their personal food costs, known as Basic Allowance for Subsistence (BAS). This allowance is provided at a flat rate. In 2024, enlisted personnel received $460.25 a month in BAS, while officers received $316.98 a month. Those who do not receive BAS—for example, enlisted personnel in basic training—receive government-provided meals.

Federal Tax Advantage While the various types of military pay—basic pay, special pay, and incentive pay—are considered part of gross income and are usually subject to federal income tax, military allowances are generally not subject to federal income tax. The tax advantage generated by the exemption of the housing and subsistence allowances from federal income tax is a part of RMC. Table 1 provides the estimated tax advantage for the illustrative examples, but the precise value of the federal tax advantage for an individual servicemember will vary depending on his or her unique tax situation.

Compensation Elements Not Included in RMC Special pays and bonuses, travel reimbursements, educational assistance, deferred compensation (i.e., an economic valuation of future retired pay and benefits), or any estimate of the cash value of non-monetary benefits such as health care, child care, recreational facilities, commissaries, and exchanges are excluded from RMC. As the value of these forms of compensation can be substantial,

In 2024, a mid-grade enlisted servicemember (E-5) received an annual average of $43,370 in basic pay, but an average of $79,945 in RMC.

Defense Primer: Regular Military Compensation

https://crsreports.congress.gov

RMC should not be considered a measure of total military compensation.

Table 1. Average Regular Military Compensation for Selected Paygrades 2024 data; assumes all cash pay (e.g., BAH instead of government quarters)

Pay

Grade Rank

Average

Annual

Basic Pay

Average

Annual

Housing

Allowance

Average

Annual

Subsistence

Allowance

Estimated

Average

Annual

Federal

Tax

Advantage

Average

Annual

RMC

E-1 Private (Army and Marine Corps)

Seaman Recruit (Navy) Airman Basic (Air Force)

Specialist 1 (Space Force)

$23,218 $19,479 $5,523 $3,484 $51,703

E-5 Sergeant (Army and Marine Corps) Petty Officer Second Class (Navy) Staff Sergeant (Air Force)

Sergeant (Space Force)

$43,370 $25,063 $5,523 $5,989 $79,945

E-8 Master Sergeant or First Sergeant (Army and Marine Corps) Senior Chief Petty Officer (Navy) Senior Master Sergeant or First Sergeant (Air Force)

Senior Master Sergeant (Space Force)

$76,812 $31,922 $5,523 $5,617 $119,874

O-1 Second Lieutenant (Army, Marine Corps, Air Force, and Space Force) Ensign (Navy)

$47,157 $22,501 $3,804 $ 5,261 $78,723

O-4 Major (Army, Marine Corps, Air Force, and Space Force) Lieutenant Commander (Navy)

$109,379 $36,591 $3,804 $10,082 $159,856

O-6 Colonel (Army, Marine Corps, Air Force, and Space Force) Captain (Navy)

$161,665 $41,775 $3,804 $13,031 $220,275

Source: Department of Defense, Selected Military Compensation Tables, January 1, 2024, “Detailed RMC Tables for All Personnel”, Page B-3, at https://militarypay.defense.gov/References/Greenbooks.aspx. Rates rounded to nearest dollar; rows may not sum exactly due to rounding. O-1 rates exclude officers with prior enlisted experience who qualify for the O-1E rate. The E-1 rate used is the All E-1 rate. Note that this publication computes the estimated average annual federal tax advantage using the standard deduction and 2024 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

Title 37, U.S. Code, Chapter 7—Allowances Other Than Travel and Transportation Allowances

26 U.S.C. §134 (Exclusion of qualified military benefits from gross income)

CRS Products

CRS Report RL33446, Military Pay: Key Questions and Answers

CRS Report R46983, Military Families and Financial Readiness

Other Resources

Defense Finance and Accounting Service, 2023 Military Pay Chart

Defense Travel Management Office, BAH Lookup

DOD Financial Management Regulations, Volume 7A, Chapter 1 (Basic Pay), Chapter 25 (Subsistence Allowances), and Chapter 26 (Housing Allowances).

Military Compensation Background Papers, 8th Edition

Defense Primer: Regular Military Compensation

https://crsreports.congress.gov | IF10532 · VERSION 15 · UPDATED

Kristy N. Kamarck, Specialist in Military Manpower

Nicholas M. Munves, Analyst in U.S Defense Policy

IF10532

Disclaimer

This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you wish to copy or otherwise use copyrighted material.