Do you know the multiple benefits included in your military pay? In addition to receiving a base income, servicemembers receive other forms of compensation, such as Special and Incentive (S&I) pay and various allowances. Read on to learn about the different components of military pay.
Basic pay makes up the bulk of your total military income. For Active Duty servicemembers and full-time National Guard and Reserve servicemembers, basic pay is called Active Duty pay. Your Active Duty pay grade depends on your military rank and years of service.
Members of the National Guard and the Reserves who aren’t full-time receive drill pay instead, which is determined by the number of drill periods you work during the month, in addition to your rank and years of service. To help keep pace with private-sector wage growth, raises to military basic pay occur periodically. View Active Duty and drill pay charts.
Both Active Duty pay and drill pay are listed as gross income on your tax return. However, you may be able to exclude this pay if you served in a combat zone. See details on combat pay exclusion.
Special and Incentive (S&I) Pay
S&I pays aren’t determined by pay grade or years served. Instead, they’re flat rates paid to servicemembers employed in specialties that may be more hazardous or may have low retention rates. These incentives are designed for recruitment and improving retention. Examples of S&I pay include Imminent Danger Pay for servicemembers deployed to combat zones, Hardship Duty Pay for servicemembers assigned to locations with poor living conditions and Assignment Incentive Pay for unusual and extended assignments. View a complete list of S&I pays.
As with basic pay, S&I pay is considered taxable income unless you served in a designated combat zone at the same time.
Allowances are funds to be used for specific needs, such as clothing, food and housing when the government doesn’t otherwise provide for them. If, for example, servicemembers aren’t provided with housing in a military barracks or dormitory, they may receive a housing allowance to help pay for nongovernment housing. Two of the most common allowances are the Basic Allowance for Subsistence (BAS) and the Basic Allowance for Housing (BAH).
Some other common allowances include:
- Dislocation Allowance (DLA)
- Clothing Allowance
- Overseas Cost of Living Allowance (COLA)
- Overseas Housing Allowance (OHA)
- Family Separation Allowance (FSA)
Most allowances aren’t taxable. An exception is personal money allowances paid to high-ranking officers. Get more information about common allowances.
Keep Tabs on Your Paydays
With a Navy Federal Free Active Duty Checking® account, you can receive your Direct Deposit of Net Pay one business day early. You’ll get your money faster without paying a monthly service fee. Use Navy Federal’s Military Active Duty Posting Calendar to track your paychecks and find out when your funds will be available for every month of the year.
This content is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.