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Paycheck Chronicles

Military Pay Is Calculated Monthly

There is an important part of military pay and allowances that many people miss:  (nearly) everything is calculated on a monthly basis, and net pay amounts are absolutely calculated on a monthly basis.  Yes, you can opt to get a mid-month pay, but it is technically an advance of half your estimated monthly pay.

Say what?

Let me see if I can explain.

Each month, a servicemember receives pay and allowances.  Nearly all of them are calculated on a monthly basis, and even the ones that aren't calculated monthly are still paid in a monthly fashion.  Base pay, BAH, BAS, and most special pays and allowances are calculated monthly.  Likewise, deductions and allotments are calculated on a monthly basis:  taxes, insurance, payments, etc.  About a week before the end of the month, the folks over at the Defense Finance and Accounting Service (DFAS) calculate the entire month's activity and figure out your net pay for the month.  They include things like changes that have occurred during the month to (hopefully) end up with an accurate amount of pay and allowances for the month.  DFAS then issues a Leave and Earnings Statement (LES) to explain how they've done their math.

But I Get Paid Twice A Month!

There is a good chance that you do.  Most military servicemembers have chosen to receive mid-month pay.  That mid-month pay is an advance of half what DFAS estimates your total monthly pay will be.  If you look on your LES, you'll see mid-month pay in the middle column, as a deduction.  The LES shows that your pay is calculated on a monthly basis, and that the mid-month pay is deducted from the total to result in your end-of-month pay.

LES

Then Why Aren't The Two Parts The Same?

The mid-month pay advance is calculated around the 7th of the month, but you don't get paid until the 15th (or the previous business day, if the 15th falls on a weekend or holiday.)  As we all know, lots of stuff can happen in seven days.  You could get promoted, move in or out of housing, get married, PCS, take out a loan, start dental coverage on your family, move in or out of a combat zone, hazardous duty location, or other special allowance area.  When the DFAS folks calculate your mid-month pay, they are using the information that they have at that time.  If your pay and allowance status changed during the month, then the pay amount will change between the mid-month calculation and the end-of-month calculation.  Even if your status changed early in the month, that information may not have made it from your unit to DFAS before the calculation cut-off date.

This is also the exact same reason that sometimes you'll have adjustments that should have been applied during the previous month.  End-of-month pay amounts are calculated about seven days before the actual payday, and they're calculated using the information available at that time.

Many of the questions that I receive can be answered by understanding that pay is calculated monthly.  This is the sort of information that should be taught during basic military training.  Either it isn't being taught, or everyone is too tired to absorb it.  Let me know if you have questions!

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