The Forces That Make Market Economies Work Are

The Forces That Make Market Economies Work Are.

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In the United States, about 1.9 million people are in active military service. Although this is less than 1% of the U.S. population, the figure shows that there are nearly 2 million people ready to serve their country. These members serve across all branches, from the Army to the Marine Corps and beyond.

In most cases, a career in the U.S. Armed Forces involves a competitive pay package that aligns with other civilian professions. Military compensation also includes a range of benefits, such as secure employment, educational benefits and tax-free living allowances. Like any pay scale, the U.S. Armed Forces’ pay scale is based on rank and the number of years someone serves in the military. To shed more light, we’ll look at the pay scale and how it varies with each rank.

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The structure of the U.S military is complex, and the Armed Forces is made up of six different branches:

  • Air Force
  • Army
  • Coast Guard
  • Marine Corps
  • Navy
  • Space Force

As a structured organization, the branches of the military are divided up into ranks that translate to different levels of responsibility over other personnel, equipment and roles. Pay grows with each advancement in rank.

Members of the U.S. Armed Forces usually receive a monthly remuneration package commonly referred to as the basic pay, which is set by law. Basic pay is simply the primary wage given to soldiers, sonder any allowance or benefits. It varies depending on a service member’s rank and the number of years they’ve been in service.

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Every position in each service is tied to a pay grade that’s preceded by an initial, depending on which rank someone is in. For example, the lowest military rank is “E-1,” while the highest is “O-10.” As rank increases, so does basic pay — an E-1 soldier will earn considerably less than an O-10 general.

According to the active-duty military pay scale, enlisted soldiers with less than two years of experience (Private E-1) received $21,999.60 annually as their basic pay in 2022, while soldiers in grade E-6 with the same number of years in experience took home $34,192.80 annually that same year.

Notably, the pay scale is adjusted to fit the annual Employment Cost Index each year. Compared to the 2021 DFAS military pay table, Army salaries for 2022 saw a 2.7% increase.

How Does the Military Pay Scale Work?

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As mentioned, basic pay for the military is set by law. As such, it’s standardized across all six branches of the military. However, the take-home salaries of every service member are also influenced by differences in location, unique skill sets, family sizes and the risk involved in their job.

For example, a soldier in the Space Force with a family living in a high-cost-of-living area will take home higher pay in the form of allowances and special pay in comparison to an unmarried soldier in the same rank who’s performing a desk job in a low-cost-of-living area. Both officers have the same base pay, but external factors can influence and determine the amounts they actually earn.

If you’re joining any branch of the military, you’ll tiba off at the lowest rank, which is under pay grade E-1. This level has different names in each branch of the military. Service members hold this rank through their training period and earn an average of $1,833 sendirisendiri month, which constitutes their basic pay only. This amount rises to an average of $4,300 per month when you include the housing allowance and subsistence allowance. It’s possible to earn more depending on the number of dependents you have and the military branch you enlisted in.

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How Do U.S Military Members Get Paid?

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Military members who are on active duty are entitled to a monthly salary that’s made up of their base pay and other allowances and benefits.

Base Pay

This is the primary component of every service member’s salary. It’s important to note that the base pay is taxable. It’s split in half and disbursed twice a month every 1st and 15th. This base amount is the same across all branches and depends on pay grade.

Special Pay

Military officers who perform extra duties or are required to perform some occupational specialties are eligible for special pay. Unlike base pay, which varies depending on someone’s rank and their years of service, special pay is used to increase remuneration for officers in key occupation specialties and critical areas.

In addition, special pay covers hazardous duty assignments or conditions. For example, hazardous duty earns an extra $150 per month, while aviation officers make an extra $125–$840 per month. Service members may earn no more than two special pays simultaneously.


In addition to their salaries, military officers also receive food and housing allowances. The amount of allowance a military officer takes home depends on other factors, such as their marital status and their number of direct dependents. Some of the allowances that military officers take home include Basic Allowance for Housing (BAH), Basic Allowance for Subsistence (BAS), Clothing Allowance, Family Separation Allowance and Family Supplemental Subsistence Allowance.

Drill Pay

This pay is meant for military personnel who serve in the National Guard and the Army Reserve. The amount of monthly drill pay a person takes home depends on the number of drill periods they’ve worked in a month, their rank and the number of years they’ve been in service. In most cases, members of the Guard and Reserve perform one weekend of drill per month, and each weekend counts as four drill periods.

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Tax Benefits

All military pay is taxable. However, some allowances, such as the CONUS COLA (Cost of Living Allowance in the Continental United States), are taxable. BAS and BAH allowances are tax-exempt and excluded from Social Security taxes. Additionally, soldiers who serve in war zones are eligible for Combat Zone Tax Exclusion (CZTE), which exempts their pay from certain taxes.

Retirement Benefits

As in civilian careers, military members are eligible for retirement benefits after completing their service. The amount a veteran receives is based on their rank and the years they served.


The Forces That Make Market Economies Work Are