Your Military Paycheck Explained
2026 Pay Rates
Military pay is more than just your base pay. Your total compensation includes tax-free allowances that add significant value. Here's a visual breakdown of where every dollar comes from — and where it goes.
Example: E-5 with 8 Years, Married, San Diego
Total Monthly Compensation: $7,038
Gross Pay (What You Earn)
After Deductions (What You Keep)
Line-by-Line Breakdown
| Component | Amount | Notes |
|---|---|---|
| Earnings | ||
| Base Pay | +$3,845.10 | E-5 over 8 years (2026) |
| BAH TAX-FREE | +$2,733.00 | San Diego, with dependents |
| BAS TAX-FREE | +$460.25 | Enlisted rate (2026) |
| Gross Pay | $7,038.35 | |
| Deductions | ||
| Federal Tax | -$432.00 | Married filing jointly, estimated |
| State Tax | -$0.00 | Most states don't tax active duty |
| FICA (Social Security) | -$238.40 | 6.2% of base pay |
| Medicare | -$55.75 | 1.45% of base pay |
| SGLI | -$26.00 | $500k coverage + TSGLI |
| TSP (5%) | -$192.26 | Gets full BRS match |
| Total Deductions | -$944.41 | |
| Net Take-Home | $5,773.94 | Plus $192 going to TSP |
Understanding Each Component
Base Pay
Your core military salary, determined by rank and years of service. This is the ONLY part of your pay that's taxable. It increases with promotions and longevity.
2026: All ranks received a 3.8% pay raise.
BAH (Basic Allowance for Housing)
Tax-free monthly allowance for housing costs. Amount varies by:
- Location — San Diego pays more than rural Oklahoma
- Rank — Higher ranks get more
- Dependents — With dependents pays $200-600 more
BAS (Basic Allowance for Subsistence)
Tax-free food allowance. Flat rates for 2026:
- Enlisted: $460.25/month
- Officers: $317.49/month
TSP (Thrift Savings Plan)
Military 401(k) with extremely low fees. Under BRS:
- Auto-enrollment: 5% (you can change this)
- Matching: DoD matches up to 5% if you contribute 5%
- 2026 Limit: $23,500/year
SGLI
Life insurance coverage up to $500,000. Cost: $25/month for full coverage plus $1 for TSGLI (traumatic injury coverage).
Military vs. Civilian Equivalent
Because BAH and BAS are tax-free, military compensation is worth more than it appears. Here's what our E-5 example would need to earn as a civilian:
| Component | Military | Civilian Equivalent |
|---|---|---|
| Base Pay | $3,845 | $3,845 (taxable) |
| BAH (tax-free) | $2,733 | ~$3,650 needed (to net $2,733) |
| BAS (tax-free) | $460 | ~$614 needed |
| Total | $7,038/mo | ~$8,109/mo ($97,308/year) |
*Civilian equivalent assumes 25% marginal tax rate for the tax-free portions.