When it comes to military finance, there are several different ways to get paid as a uniformed service member. You’ll receive your basic pay–the very minimum you earn while serving–but also you will be eligible throughout your military career for advance pay, special pay, and bonuses.

While many service members may draw all of the above, many have unique combinations of these bonuses and other offerings. Some qualify for more money because they must perform hazardous duty, others qualify for certain bonuses because they are professionally fluent in more than one language.

Still others may qualify for special pay because their jobs are in high demand–pilots are just one group of military people compensated more because of special skills.

Advance Pay

The first thing we’re examining here is also one of the most common types of military pay above and beyond your basic pay not associated with housing, separate rations, or other entitlements officially known as “allowances”. Allowances are not like special pay and bonuses (see below) in that they are not subject to federal taxes.

Advance pay is not an allowance, but nor is it “special pay” with specific criteria requiring certain conditions to be met such as a re-enlistment, remaining in a specific short-handed career field, etc. Instead, advance pay is something all service members may be entitled to apply for in connection with a permanent change of station move.

Essentially an interest-free loan on your paycheck, you are required to repay the loan with a series of automatically deducted payments (the DoD takes the funds out of your paycheck before you get it) that can stretch over a full year.

Some people believe advance pay is a bad idea, noting that the amount you must pay per month over the repayment year will reduce your monthly cash flow.

Think It Over First

Those already on tight budgets may need to consider that detail before making the plunge. But it’s not always a bad move to take advance pay–an interest-free loan is cost effective if you plan on using the money you are borrowing from yourself wisely.

One such use? Offsetting the expense of relocating to another assignment, especially if you have to move family members.

Some troops are assigned from cities with a typical cost-of-living into a more expensive region. Imagine being reassigned from an Air Force Base in the midwest to one in Southern California. Advance pay could be a big help in making purchases associated with the relocation, getting a vehicle up to emissions standards in the new state, etc.

Advance pay is best when you have a plan and a financial goal to inform your decision to borrow from your own paycheck.

Advance Travel Pay 

One type of advance pay is specifically limited to official travel. According to the Department of Defense, advance travel pay is authorized for those who do not yet have a government travel card. Advance travel payments may be authorized for certain allowances including per diem, and the Dislocation Allowance.

This is applicable, “if the Member is not a Government Travel Charge Card (GTCC) holder or an advance is not specifically prohibited in the orders.” Those who do have a government travel card are NOT authorized for such advance travel pay.

If a member is a card holder, the GTCC must be used for PCS travel and advances are not authorized.

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Special Pay

Aside from your basic pay and advance pay, many in the Army, Navy, Air Force, Marine Corps, Space Force and Coast Guard may qualify for special pay offered by their branch of service as a retention and recruiting incentive.

For example, troops who pull “hardship duty” may be authorized Hardship Duty Pay, typically offered to those who are assigned overseas in “hardship locations” which, according to the Defense Finance And Accounting Service official site, where living conditions are “substantially below the standard most members in the continental United States would generally experience.”

The DoD has a set of criteria for special pay and there are often minimum time-on-station requirements. For example, for Hardship Duty Pay, the qualifying criteria includes:

• Serving on PCS in a designated area, or serving in a temporary duty or deployed status for over 30 consecutive days in a designated area
• Those who relocate to a designated area as part of a permanent change of station move are eligible from the day of arrival
• Troops who are TDY in such areas are not eligible during the first 30 days of consecutive service at the designated location

Not all special pay has those specific instructions, but it’s easy to see that the DoD prefers specific qualifying duty, dates, and other conditions in order to draw some special pay. Not all special pay is hardship-related. Some is offered for hazardous duty, and some may be offered as an incentive to accept a specific military assignment.

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Bonuses

Recruiting and retention is very important in the military, and that is one reason why the DoD offers bonuses to those enlisting or commissioning into critical career fields, and to those who are currently serving with hard-to-replace skills.

When it comes to recruiting bonuses, a new enlistee may earn a bonus for signing up for a specific career field or MOS, but there are also “quick ship” bonuses paid to those who are willing to go to basic training fairly quickly after making the commitment. The U.S. Army Recruiting official site offers qualifying new recruits as much as $12,000 “just for shipping to training within 30 days of enlistment.”

And then there are the “retention bonuses” aimed at those who are already serving with an eye toward keeping them motivated to re-enlist and/or remain in the career field. These service members include pilots, military doctors, linguists, explosive ordnance disposal techs, and many others qualify for these incentives every year.

Qualifying Service Or Service Commitments Required

These bonuses are usually quite specific and don’t apply in an “open/general” way. A good example? You may be allowed to receive a Foreign Language Proficiency Bonus for example, but in most cases you may have to take a test showing your capacity to use other languages professionally.

Others may qualify for a Selective Retention Bonus which is paid to those who agree to re-enlist for a specific qualifying amount of time. These bonuses are usually paid to those in career fields that are difficult to maintain staffing levels for; a good example of this type of pay is offered to Army soldiers in hard-to-fill MOS slots who agree to re-enlist for a minimum of three years.

Such bonuses may be paid in flat-rate, lump sum payments and it’s important to remember that military bonuses are considered income by the IRS and are subject to taxation.

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Where To Get Information About Advance Pay, Special Pay, And Bonuses

In some cases, if you qualify for a bonus or for special pay, you’ll be informed by your command support staff–especially if you must test for proficiency pay. The tests required are not optional, and scheduling will be something you’ll need to arrange with your orderly room or the organization responsible for scheduling and processing such tests.

In most cases, the base Finance Office will have all the information you need, but at a higher level the Defense Accounting and Finance Service official site has a wealth of general information about all forms of military pay and the requirements for drawing it.

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Joe Wallace is a 13-year veteran of the United States Air Force and a former reporter for Air Force Television News

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How does Reserve pay work? If you’re considering a career as a Reservist, understanding the factors that determine your monthly earnings for drill weekends and mobilization to serve on active duty is important.

Reserve pay functions like active duty pay in some respects but is quite different than others. Knowing the difference is huge, especially if you are transitioning out of an active duty career with plans to go Reserve.

Some Fundamentals About Military Pay

In general, active duty military pay and Reserve pay have some things in common including the fact that this income is taxable by the federal government.

Both Reserve and active duty pay is also similar in the sense that any allowances you get including housing, “separate rates” or the Basic Allowance for Subsistence, and the military clothing allowance are NOT federally taxable.

Both active duty troops and Reservists will see their pay increase the longer they serve. TIG or Time-In-Grade refers to the amount of time you have spent serving at your current rank. The longer you serve in your current rank the higher your pay will go up to certain limits established by the DoD and the branch of service you’re in.

Active duty troops are paid at a rate and amount appropriate for their service commitment–they are paid to be on duty or subject to recall to duty 24/7. Active duty pay includes basic pay, allowances, special pay such as hazardous duty pay or language proficiency pay, and clothing allowances.

Fundamentals About Reserve Pay

Like the active duty troops, Reservists also get basic pay, allowances where appropriate, and special pay where appropriate. But this pay is offered only for the periods of service the Reservists show up for including training, drill weekends, and active duty service when activated.

Military pay charts for Reservists show basic pay ONLY and these charts do not reflect allowances or other payments above and beyond basic pay. Depending on your status as a Reserve member you may be eligible to earn time on active duty that can be counted toward a Post 9/11 GI Bill once the minimum active duty service time (not drill weekends or the two weeks of training) has been reached.

Reservists who are called to active duty will be paid for their active service the same as for “regular Army” troops or other service members–Reservists called to active duty service are compensated for the time spent working on active duty and those Reservists who serve on active duty earn days toward qualifying for education benefits like the Post 9/11 GI Bill.

Drill Weekend Pay

Drill weekends are paid monthly based on the number of drill periods worked in a weekend. Your drill weekend may contain multiple drill periods, not just one. You will be compensated for your drill weekends based on your time in grade and time in uniform, as we’ll explore below. You are not paid for weekends you don’t drill on. The annual training requirement pays you in a similar fashion to active duty service member–you are paid for the full two weeks of service.

Time In Grade, Time In Service Counts

There is also an overall TIS or Time In Service which also affects your pay and certain allowances; the longer you spend in uniform as an active duty service member or Reservist, the higher your pay can go.

In both cases there are federal limits on the amount of the pay raise you get upon certain career milestones such as passing the two-year mark on your initial enlistment depending on the rank and time spent serving. Stay in the military for six years and you may be entitled to a pay raise at years two and four, but depending on your Time-In-Grade you may stop getting pay raises at year six until you get promoted.

Promotions are dependent on both time in grade AND time in service–you can’t get promoted to another rank without having spent a minimum amount of time on duty in your current military rank and you’ll find it important to seek guidance on how long you must serve at your current rank before being eligible for a promotion.

An Enlisted Example

Let’s take a look at the pay chart for an enlisted E-1 Army Reservist who has six years in military service. The numbers seen below were current at press time, but these numbers are always subject to revision by the DoD so consider the numbers below as a reference only. These numbers are cumulative totals based on two weeks of Reserve training per year plus one drill weekend per month:

• Army Reserve E1 with >2 Years Of Time In Grade/Time In Service: $3,639.51 (the Army official site points out that an E-1 will earn less in the first four months of military service than in successive months)
• The same Army Reservist with four years or more of time in grade/time in service earns $3,639.51
• The same Army Reservist who serves as an E1 for six years also earns $3,639.51

At this point, sharp-eyed readers will notice that the amounts listed above DO NOT CHANGE. Why? Here’s one of the nuances of the military pay system. The Reserves do not want new troops to sign up for duty only to stall out in their military career at a certain rank.

An E1 with six years of military service is not going to get a pay raise for one important reason–the Army doesn’t want people “hanging out” in these lowest ranks for longer than a prescribed time.

But an Army Reservist who has been promoted to E3 starts off at $4,289.67 at  a >2 years pay rate for the year’s worth of drill weekends and two weeks of training. Compare that to the four-year level which is of $4,835.88 total for drill weekends and the two weeks of training.

The pay increase does not apply at six years, indicating the Army might prefer troops who are more upwardly mobile–consider the four-year pay for an Army Reserve E-5 at $6,071.94 compared to the six year pay increase to $6,498.37. It’s easy to see that the Army Reserve wants to encourage career upward mobility when reviewing these pay charts.

In Conclusion

Reserve Pay is a system that might take some getting used to, but it’s designed to be as fair as possible for military members who want to serve but who can’t or don’t commit to a full-time military career. You can be called to active duty on a temporary basis, and when you are you should expect your pay and other compensation to reflect your active status until you are demobilized and placed back onto Reservist status.

The legal/financial implications of this could affect your taxes, eligibility for military education programs, etc. Being called to active duty is the risk one takes when signing up for the Reserves, but it can also be quite adventurous both in terms of general experience and your financial bottom line.

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Joe Wallace is a 13-year veteran of the United States Air Force and a former reporter for Air Force Television News

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