About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

1 [1] (December 7, 2016)

handle is hein.crs/crsmthmbbzg0001 and id is 1 raw text is: Congressional Research Service Informr g the Iegaslaitive debate since 1914 December 7, 2016 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 servicemember receive every payday. It is widely used as a basic measure of military cash compensation levels and for comparisons with civilian salary levels. For 2016, a mid-grade enlisted servicemember (E-5) received an annual average of $33,760 in basic pay, but an average of $62,019 in RMC. 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. 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 simple basic pay when comparing military with civilian compensation, analyzing the standards of living of military personnel, or studying military compensation trends over time. Basic Pay For most servicemembers, basic pay is the largest element of the compensation they receive in their paycheck and typically accounts for about two-thirds 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 40% of servicemembers receive government-provided housing (in the form of barracks, dormitories, ship berthing, or government-owned family housing), with the remainder receiving a housing allowance to offset the costs of the housing they rent or purchase in the civilian economy. 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 or not 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. The average 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, but servicemembers of similar paygrade and dependents status should be able to pay for roughly comparable housing regardless of their duty location. Table 1 provides illustrative examples of how much BAH servicemembers receive annually. 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 2016, enlisted personnel received $368.29 a month, while officers received $253.63 a month. Those who do not receive BAS-for example, enlisted personnel in basic training-receive government-provided meals. Federal Tax Advantage Certain types of military compensation are not subject to federal income tax, thus generating a tax benefit for servicemembers. 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, on the other hand, are generally not considered part of gross income and are not subject to federal income tax (nor are the various in-kind benefits of the military-for example, government housing, health care, fitness centers, subsidized grocery stores). RMC includes only the federal income tax advantage provided by the exemption of housing and subsistence allowances from gross income. 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. www.crs.gov 1 7-5700

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most