Military Pay and Allowances

The military finance system is complex and multi-faceted. Your military unit and finance office are able to assist you with any questions about pay and allowances.

Basic Pay

There are many resources available to determine amounts of basic pay, rates of pay are determined by rank and time of service:

• Basic Pay and Basic Allowance for Subsistence (BAS)
• Reserve Drill Pay 
• Basic Allowance for Housing (BAH) and BAH-II
• Incentive or Special Pay, Family Separation Allowance and Other Allowances may also apply to your Servicemember's specific individual status

Direct Deposit of Pay and Allowances

Direct deposit is mandatory. Pay and allowances will be sent to the Servicemember’s designated financial institution account via electronic funds transfer on a regular basis (1st and 15th of each month) if on active duty, and within a reasonable time after orders and/or travel claims are submitted to your unit’s administrative personnel.

Income Taxes

Federal income and social security taxes are automatically withheld from basic, special and incentive pays, inactive training pay and funeral honors duty stipend. Allowances such as BAS and BAH are exempt. Servicemembers on active duty pay state income tax only to their state of legal residence regardless of where they are serving.

Special Tax Exemptions

Military service may cause Servicemembers to incur expenses for which the law does not allow direct reimbursement. Servicemembers are, however, allowed to deduct some of these expenses from their personal income tax filing.

Tax benefits from Military OneSource

• Free tax consultations and free e-filing for Servicemembers and their family members
• Free financial planning and counseling

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