The FY 2008 Military Authorization Act includes an across-the-board increase in military base pay of 3.5 percent, effective January 1, 2008.
The actual pay raise was late this year. Congress didn't present the annual Defense Authorization Act to the President for signature until late December. In a surprise move, instead of the signing the act into law, he vetoed it, over some items contained in the bill that had nothing to do with military pay (see related article ). Congress reconvened following their Christmas break and removed the items that the President objected to. The President signed the new act into law on January 28. In January, military members only received a 3.0 percent pay raise (the minimum required by previous law). However, the new bill made the 3.5 percent reotractive to Jan. 1, so members will receive back-pay for the .5 percent difference retroactive to Jan. 1.
The Bush administration had submitted their proposed 2008 Military Budget request to Congress, asking for a flat 3.0 percent across-the-board raise. Congress felt it wasn't enough. The 3.5 percent raise is 0.5 percent greater than the average increases in private sector raises. According to military advocacy groups, the 2008 raise has reduced the "pay gap" between military pay and comparable civilian pay to about 3.4 percent. The gap peaked at 13.5 percent in 1999, but over the last nine years, a series of raises slightly above the annual increase in the Department of Labor's Employment Cost Index (ECI) has narrowed the gap considerably.
Under previous law, time-in-service raises, known as "longivity raises," stopped when one reached 26 years of service. The Fiscal Year 2007 Military Authorization Act established time-in-service raises for senior enlisted, senior warrant officers and senior commissioned officers who have more than 30 years of service.
In addition to the basic pay shown below, military members may also be entitled to other pay and allowances, such as housing allowance, food allowance, flight pay, sea pay, submarine pay, jump pay, etc. Basic pay is subject to Federal income taxes unless it is earned in a designated combat zone. Whether or not basic pay is subject to state income taxes depends upon the laws of the state that the member claims as his/her official legal residence.
On the below chart, the "E" grades (O-1E, O-2E, and O-3E) rates indicate officers who also have more than four years of enlisted or warrant officer service. Such officers are paid at a different rate than officers without at least four years of enlisted or warrant service.
The below chart shows the monthly 2008 Basic Pay rates for officers with 20 or fewer years of military service. For officers with more than 20 years of service, see this chart.
2008 Basic Pay