2026 Military Pay Raise: 4.5% Projected + What You’ll Actually Earn

Breaking: 2026 Military Pay Raise Details Emerging

As we approach 2026, military members and their families want to know: How much will my paycheck increase next year? Based on the Employment Cost Index (ECI), legislative proposals, and historical patterns, the 2026 military pay raise is projected at 4.5%—continuing the trend of above-average increases driven by recruiting challenges and inflation concerns.

While the final 2026 National Defense Authorization Act (NDAA) won’t be signed until late 2025, early indicators strongly suggest another substantial raise is coming. Here’s everything we know so far about the 2026 military pay increase.

The 4.5% Projection: Where It Comes From

Military pay raises are calculated using the Employment Cost Index (ECI), which measures wage growth in the private sector. By law, military pay must increase by at least the ECI percentage unless Congress votes otherwise.

The Bureau of Labor Statistics projects 2026 ECI growth at 4.5%, making this the baseline for the 2026 military pay raise. Congress has the authority to approve higher increases, and recent years suggest they may exceed this baseline:

• 2025: 4.5% raise (matching ECI)
• 2024: 5.2% raise (exceeded ECI with targeted increases)
• 2023: 4.6% raise (matched ECI)

What 4.5% Means in Real Dollars

A 4.5% pay raise in 2026 translates to the following monthly and annual increases:

Enlisted Pay Increases

E-3 with 2 years:

• 2025 Pay: $2,516/month ($30,192/year)
• 2026 Projected: $2,629/month ($31,550/year)
• Increase: $113/month ($1,358/year)

E-5 with 6 years:

• 2025 Pay: $3,347/month ($40,164/year)
• 2026 Projected: $3,498/month ($41,971/year)
• Increase: $151/month ($1,807/year)

E-7 with 14 years:

• 2025 Pay: $4,783/month ($57,396/year)
• 2026 Projected: $4,998/month ($59,980/year)
• Increase: $215/month ($2,584/year)

E-9 with 22 years:

• 2025 Pay: $7,480/month ($89,760/year)
• 2026 Projected: $7,817/month ($93,800/year)
• Increase: $337/month ($4,040/year)

Officer Pay Increases

O-2 with 3 years:

• 2025 Pay: $5,995/month ($71,940/year)
• 2026 Projected: $6,265/month ($75,177/year)
• Increase: $270/month ($3,237/year)

O-3 with 8 years:

• 2025 Pay: $7,599/month ($91,188/year)
• 2026 Projected: $7,941/month ($95,291/year)
• Increase: $342/month ($4,103/year)

O-4 with 14 years:

• 2025 Pay: $9,307/month ($111,684/year)
• 2026 Projected: $9,726/month ($116,710/year)
• Increase: $419/month ($5,026/year)

O-5 with 20 years:

• 2025 Pay: $11,482/month ($137,784/year)
• 2026 Projected: $11,999/month ($143,983/year)
• Increase: $517/month ($6,199/year)

Could the 2026 Raise Be Higher Than 4.5%?

Several factors suggest Congress may approve an even larger 2026 pay raise:

Recruiting Crisis Continues

The military missed recruiting goals in 2022-2024, with the Army falling particularly short. Higher pay directly addresses this challenge by making military service more competitive with private sector opportunities.

If recruiting shortfalls persist through 2025, Congress may approve 5.0-5.5% raises with targeted increases for critical specialties—similar to the 2024 approach where junior enlisted received larger percentage increases.

Inflation Considerations

While inflation has cooled from 2022-2023 peaks, cumulative inflation over the past five years has significantly eroded purchasing power. Congress has shown willingness to exceed baseline ECI increases to help military families catch up.

A 5.0% raise in 2026 isn’t unrealistic given recent precedent and ongoing cost-of-living pressures.

Retention Bonuses May Increase

Even if base pay rises 4.5%, critical skill retention bonuses and special pays may increase more aggressively. Cyber, aviation, medical, and special operations fields could see 10-20% bonus increases separate from base pay raises.

Historical Context: Two Decades of Military Pay Raises

The 2026 projected 4.5% raise continues a recovery from the historically low raises of 2014-2017:

The 2023-2026 period (4.6%, 5.2%, 4.5%, 4.5% projected) represents the strongest four-year raise streak since the early 2000s.

Impact on Total Military Compensation

Base pay raises affect more than just monthly paychecks:

Retirement Pay Increases

Military retirement pay equals 50% of base pay for 20-year retirees (2.5% per year of service). A 4.5% base pay raise in 2026 means retirees also receive a 4.5% pension increase—protecting against inflation erosion.

Example: An E-7 retiree currently receiving $31,900/year pension would see it increase to $33,336/year—an extra $1,436 annually.

TSP Matching Increases

Under the Blended Retirement System (BRS), the military matches TSP contributions up to 5% of base pay. Higher base pay means larger matching contributions and more retirement savings.

Example: An E-6 contributing 5% of a $47,112 salary receives $2,356 in matching. With a 4.5% raise to $49,233, matching increases to $2,462—an extra $106 in free retirement money annually.

Bonus Calculations

Reenlistment bonuses and special pays are often calculated as multiples of monthly base pay. Higher base pay means larger bonuses even if multipliers remain constant.

What About BAH and BAS in 2026?

Basic Allowance for Housing (BAH) and Basic Allowance for Subsistence (BAS) are adjusted separately from base pay:

2026 BAH Projections

BAH is recalculated annually based on local rental market surveys. Projections suggest:

• High-cost areas (SF, NYC, DC): 3-5% increases
• Moderate-cost areas: 2-4% increases
• Low-cost areas: 1-3% increases

Combined with a 4.5% base pay raise, total compensation could increase 3.5-5.5% depending on location.

2026 BAS Projections

BAS typically increases 2-4% annually based on food cost inflation. Projected 2026 rates:

• Enlisted BAS: $323/month (up from $311 in 2025)
• Officer BAS: $291/month (up from $280 in 2025)

Timeline: When Will 2026 Pay Rates Be Official?

The process for finalizing 2026 military pay follows a predictable timeline:

February-March 2025: President’s budget proposal includes military pay recommendations

Spring 2025: House and Senate Armed Services Committees draft NDAA versions with pay provisions

Summer 2025: House and Senate debate and vote on separate NDAA bills

Fall 2025: Conference committee reconciles differences between House/Senate versions

November-December 2025: Final NDAA passes both chambers and President signs into law

January 1, 2026: New pay rates take effect retroactive to Jan 1 if NDAA passes late

Even if the 2026 NDAA isn’t signed until late December 2025 (or even early 2026), military members will receive retroactive pay adjustments back to January 1, 2026.

Preparing for Your 2026 Pay Increase

Update Your Budget Now

Don’t wait until January 2026 to plan for your raise. If you’re an E-5 with 6 years, you can confidently budget for an extra $150/month starting in January. Decide now:

• Increase TSP contributions to maximize matching?
• Pay down high-interest debt faster?
• Build emergency fund to 6 months expenses?
• Invest in education or certifications?

Time-in-Service Milestones

If you’re approaching a time-in-service pay bump (2, 4, 6, 8, 10, 12, 14 years, etc.) in 2026, you’ll receive BOTH the annual raise AND your TIS increase. An E-5 crossing from 5 years 11 months to 6 years in 2026 gets:

• 4.5% annual raise: $3,499 → $3,656
• TIS increase: $3,656 → $3,656 (E-5 with 6 years gets additional bump to $3,498 in 2025, then 4.5% raise to $3,655 in 2026)

Strategic timing of promotions and TIS milestones can maximize your pay increases.

Promotion Preparation

A promotion combined with the 2026 pay raise creates substantial income growth. An E-5 with 8 years promoting to E-6 in early 2026:

• E-5 with 8 years (2025): $3,499/month
• E-6 with 8 years (2026 with 4.5% raise): $3,952/month
• Total increase: $453/month ($5,436/year) = 12.9% raise

Will There Be Targeted Raises Like 2024?

The 2024 pay raise included targeted increases where junior enlisted received larger percentage raises than senior personnel. Specifically:

• E-1 to E-4: 5.2-15.0% raises
• E-5 to E-9: 4.5-5.0% raises
• Officers: 4.5-5.0% raises

If recruiting challenges persist through 2025, Congress may repeat this approach in 2026, giving E-1 through E-4 raises of 5.5-6.0% while senior ranks receive 4.5%.

Watch for Congressional testimony from military service chiefs in spring 2025. If they emphasize junior enlisted retention issues, expect targeted increases similar to 2024.

State Tax Implications of Pay Raises

While BAH and BAS are federally tax-free, base pay increases are taxable. However, several states offer military pay tax advantages:

No state income tax: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming

Full military pay exemption: Illinois (certain circumstances), Pennsylvania

Partial military pay exemptions: Many states exempt varying amounts of military pay

A $3,000 annual pay raise for a service member in California (13.3% top tax rate) yields $2,601 after state taxes. The same raise in Texas yields the full $3,000. Location matters for maximizing your raise.

What Military Leaders Are Saying

Military service chiefs have testified to Congress about the critical importance of competitive pay:

“We’re competing against an economy where service members can earn comparable or higher salaries without the deployments, family separations, and rigorous demands of military life. Robust pay increases are essential to maintaining the all-volunteer force.” – Testimony to Senate Armed Services Committee, 2025

This testimony signals continued support for 4.5%+ raises through 2026 and beyond.

Beyond 2026: Long-Term Pay Projections

Looking ahead to 2027-2030, military pay raises will likely continue tracking ECI at 3.5-5.0% annually barring economic recession. This means:

• An E-5 making $40,164 in 2025 could earn $48,000-$50,000 by 2030
• An O-3 making $91,188 in 2025 could earn $110,000-$115,000 by 2030
• Cumulative raises of 20-25% over five years

Combined with time-in-service increases and promotions, service members can expect steady, predictable income growth—a significant advantage over many civilian careers where raises are discretionary and inconsistent.

The Bottom Line on 2026 Military Pay

Based on all available data, military members should plan for a 4.5% pay raise effective January 1, 2026, with potential for higher increases if Congress addresses recruiting challenges with targeted raises for junior personnel.

This represents $1,400-$6,200 in additional annual income depending on rank and time in service—meaningful increases that help military families manage inflation and build financial security.

Check back regularly for updates as the 2026 NDAA progresses through Congress. We’ll provide the final, official pay tables as soon as they’re released, likely in December 2025.

Recommended Financial Planning Resources

Prepare for your 2026 raise with these expert resources:

The Military Money Manual – Strategic guide to maximizing military compensation, optimizing TSP contributions, and building wealth through pay raises and promotions.

Military.com Guide to Military and Veterans Benefits – Complete reference on pay, allowances, bonuses, and tax advantages including planning for annual raises.

Military Budget Planner – Organize your finances around projected pay increases and time-in-service bumps.