Service Member Compensation More Competitive Than Many Realize, War Department Says

The War Department kicked off the yearlong Military Compensation Educational Campaign this summer to help service members and their families learn about the total value of their compensation, so they can better achieve and maintain financial readiness.

While the department continues to work with Congress, federal agencies, and military and veterans service organizations to strengthen financial security and improve the quality of life for service members and their families, there is still a perception that many service members are unaware of the full scope of benefits provided to them, explained Tim Dill, the assistant secretary of war for manpower and reserve affairs.

Every four years, DOW reviews service member compensation to see how the benefits provided to uniformed personnel compare with those of their private sector peers. Items reviewed include pay, housing, subsistence and other allowances, incentives, healthcare, education and retirement benefits.

The most recent Quadrennial Review of Military Compensation, or QRMC, released in January 2025, revealed that service members' compensation is not only competitive with but often better than that of their counterparts in the private sector.

Base Pay and Allowances

One big takeaway was that military compensation compares well against that of civilians with similar education and work experiences.

"When we looked across the officer ranks, we found that, overall, officers are in the 76th percentile when compared against the civilian workforce equivalents for experience and education," Dill said.

He explained that this means military officers are doing better than 76% of individuals in the private sector who have comparable education and work experience, adding that the numbers are even better for enlisted service members, who are in the 83rd to 90th percentiles.

Pay for a recent high school graduate earning hourly pay in the private sector and pay for a military E-4 may appear similar, Dill said, if you look only at base pay - but that's not the whole story.

For instance, an Army specialist who lives in the barracks does not pay rent, and married soldiers receive a housing allowance each month - in addition to base pay.

That same soldier also receives healthcare, with no co-pays; medical benefits extend to spouses and children as well.

Beyond regular military compensation, the department also uses specialized incentive pays for critical skills and provides nonmonetary benefits - like tax-free shopping at commissaries and comprehensive family support programs - that stretch a military family's purchasing power far beyond its base salary.

Dill said it's important that service members and their families understand military compensation, but so too should those who are considering joining the military.

"This Military Compensation Educational Campaign is focused on the fact that we offer far stronger benefits than most people realize - and we just want young American men and women to make a decision on whether to serve, only after being fully informed," he said.

Retirement and Savings

Military compensation also includes retirement benefits.

Dill explained that the blended retirement system for service members is built on two primary elements. The first is the traditional 20-year retirement plan. Under that plan, Dill said active-duty service members will receive 40% of their base pay after serving 20 years, starting immediately after retirement, regardless of age.

The second element of the blended retirement system is the Thrift Savings Plan, a voluntary retirement account in which service members can contribute and the department matches their contribution. Service members covered by this system can receive up to 5% total government matching on their base pay. This consists of an automatic 1% service contribution and up to an additional 4% in matching funds based on their voluntary contributions.

"Because of blended retirement, service members can elect to know that no matter how much time they serve, they will take a retirement account with them," Dill said. "They can start contributing to the Thrift Savings Plan immediately - and as they progress throughout their careers - and the department will begin contributing in year one also."

The money service members put into the TSP grows with compound interest and investments for as long as they leave money in the account.

Education and Experience

To help service members prepare for life after the military, the department offers education benefits, credentialing assistance and tuition assistance. It also offers the SkillBridge program, which provides transitioning service members with work experience through internships and apprenticeships during their final months of service.

All of these benefits and programs are now also part of the War Department's Project Patriot Pipeline initiative, which helps to align currently serving service members with mission-critical careers in the department and enable transitioning service members to fill critical vacancies in the defense industrial base.

Dill emphasized that the defense industrial base - the companies that make military hardware and materiel for the War Department - must always be ready to provide the right equipment and munitions in a timely manner.

"One way to support that is by guiding transitioning service members, military spouses and civilians towards defense industrial base jobs," he said.

Through programs like SkillBridge, Dill added, and with credentialing programs and tuition assistance, the War Department doesn't just prepare service members for post-military careers; it offers them a way to find meaningful work even after they are no longer in uniform.

Dill said the goal of the yearlong Military Compensation Educational Campaign is to help service members, their families, American citizens, potential future service members and their families better understand just how the military services compensate those who serve, with the hope of helping currently serving service members take better advantage of what's available to them.

"During the next 12 months, we'll have sustained exposure to this message to make sure it's connecting and resonating with military service members and their families," Dill said. "We are going to get comprehensive. With the support of the military service departments, we will help our warfighters and their families review and better understand every aspect of the compensation. It's a pretty broad topic, and sometimes there are many things that our people are not aware of; we're going to fix that."

Dill encourages those who want to learn more about these benefits to visit their local family readiness center or the Military Compensation Educational Campaign webpage, https://militarypay.defense.gov/Compensation-Education/.