https://crsreports.congress.gov
Updated November 23, 2022
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 2023
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)).
The rate of basic pay an individual receives varies based on
his or her paygrade (rank) and years of military service. For
example a newly enlisted recruit (paygrade E-1) with four
or more months of service and less than two years of
service receives $1,833.30 in basic pay per month in 2022,
while a more senior enlisted person (paygrade E-6) with
between 10 and 12 years of service receives $3,987.60 per
month. A newly joined officer (paygrade O-1) with less
than two years of service receives $3,477.30 in basic pay
per month in 2022, while a more senior officer (paygrade
O-4) with between 10 and 12 years of service receives
$7,891.80 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 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 2019 and the
quarter that ended in September 2020, the ECI increased by
2.7%. Hence, the pay raise for calendar year 2022, as
calculated by the statutory formula, was 2.7%.
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 2023
The adjustment in basic pay for calendar year 2023 under
the statutory formula is 4.6% (reflecting the increase in the
ECI between the third quarter of 2020 and the third quarter
of 2021). The actual increase in basic pay for 2023 can be
different, depending on presidential or congressional action.
Congressional and Presidential Action
for 2023
The FY2023 President’s Budget requested a 4.6% increase
in basic pay, equivalent to the statutory formula. The
House-passed version of the National Defense
Authorization Act (NDAA) for FY2023, H.R. 7900, and the
Senate Armed Services Committee reported version of the
FY2023 NDAA, S. 4543, do not contain provisions
specifying the increase in basic pay. Absent new law
specifying a different rate, the increase specified by the
statutory formula will go into effect on January 1, 2023.
