Your Military Pay, Dissected

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Your military pay is composed of multiple benefits. In addition to receiving a base income, servicemembers also 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

Basic pay makes up the bulk of your total military income. For active-duty servicemembers and full-time-duty National Guard and Reserve servicemembers, basic pay is referred to as active-duty pay. Your active-duty pay amount depends on your pay grade (which is affected by your military rank) and your 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, regular pay raises are provided to military basic pay. Both active-duty pay and drill pay are to be listed as gross income on your tax return. However, you may be able to exclude said pay if you served in a combat zone.

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, for example, may be more hazardous or have low retention rates. These pays are designed for recruitment, retention and compensation purposes. Over 60 S&I pays are currently available, including 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.

As with basic pay, S&I pays are considered taxable income unless you served in a designated combat zone at the time it was earned.


Allowances are funds to be used for specific needs, such as clothing, food and housing when the government doesn’t provide for them otherwise. If, for example, a servicemember isn’t provided with housing in a military barracks or dormitory, he or she may receive a housing allowance to help pay for non-government housing. Two of the most common allowances are the Basic Allowance for Subsistence (BAS) and the Basic Allowance for Housing (BAH), which help offset costs for meals and housing, respectively.

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, with a notable exception being personal money allowances paid to high-ranking officers.

Keep Tabs on Your Paydays

Click here to see Navy Federal Credit Union’s Military Active Duty Posting Calendar and never lose track of your paychecks. Find out when your funds will be available for every month of the year. For more information on receiving Direct Deposit of Net Pay one business day early, click here to learn about Navy Federal Active Duty Checking® accounts.

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