https://crsreports.congress.gov
Updated November 23, 2022
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 and allowances that add significantly to it, and
tax benefits as well. 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). BAS is provided at a flat rate. In
2022, enlisted personnel received $406.98 a month, while
officers received $280.29 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,
