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1 1 (November 23, 2022)

handle is hein.crs/govejmz0001 and id is 1 raw text is: Congressional Research 3 rvice Updated November 23, 2022 Defense Primer: Military Pay Ra 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 The adjustment in basic pay for 2023 under the statutory formula is 4.6%, although Congress can enact a law to supersede this adjustment. 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 0-1) with less than two years of service receives $3,477.30 in basic pay per month in 2022, while a more senior officer (paygrade 0-4) 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 22 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.

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