In addition to base pay, you may be entitled to more money-growth opportunities. (chirokung2-123RF)

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In addition to your base pay, you may qualify for additional compensation and specific allowances that can increase your income, sometimes in small increments and sometimes in larger amounts.

For example, you may earn added pay based on specific skills, participation in special or unusual assignments, or by taking on dangerous jobs. And, you may sometimes qualify for substantial incentive payments, including retention or reenlistment bonuses or career continuation pay if you’re part of the BRS.

Your income as a service member is far more than just basic pay. Military Compensation

You are also entitled to tax-exempt allowances for food, for housing if you don’t live in government quarters, and for separation from your family if your assignment takes you away from home.

Taking full advantage of these opportunities for extra pay, incentives, bonuses, and allowances can increase your overall compensation while you’re on active duty. And they can improve your long-term financial situation, even after you leave the military.

To keep up to date on your income, you should review your Leave and Earnings Statement (LES) each month. It shows your current wages, special pays, and the allowances you are receiving as

well as amounts that have been deducted. You can find a sample LES in the following pages.

myPay is a mobile-friendly DFAS website that allows you to access your LES, manage your allotments and tax withholdings, and see and print your tax documents. You can also use the website to update your banking information, review and print travel vouchers, and handle other financial matters electronically.

To learn more about this service, visit www.dfas.mil and click on the myPay link. To open a myPay account, you’ll need to choose an ID and password. To complete enrollment, you’ll need your DoD Common Access Card (CAC) and Smart Card reader to complete the enrollment. If you don’t have the reader, you’ll get a temporary password by email or regular mail.

Since documents that are delivered electronically arrive more quickly and are more secure than those that are mailed, you can opt in for that service—or opt out of it—at any time. But as with every­thing you do online, you should take precautions to safe­guard access to your account and protect it from scams and identity theft.

As a service member, you’ll also receive a Personal Statement of Military Compensation that provides monthly and annual totals for the value of your:

As a service member you will recieve allowances for housing and food. (rudzhan-123RF)

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The statement includes informa­tion about your retired pay and eligibility to collect it, the formula used to calculate what you’ll receive, and the associated COLAs.

In addition, the statement provides an extensive list of other benefits that are available. Some, including access to the commissary and PX, you may use regularly, while others you may or may not choose to take advantage of, such as education programs, legal counseling, spouse employment counseling, and space-available travel.

You can use the summary to help determine how much you’d have to earn in a civilian job to maintain a standard of living comparable to what you have in the military.

A significant feature of military compen­sation is that substantial percentages of your income are tax-exempt, reducing the tax you owe and increasing what you have available to spend and save.

When you’re in a combat zone or receive hostile fire or imminent danger pay, you qualify for the Combat Zone Tax Exclusion (CZTE). This means that some or all the pay you receive during this period, including a bonus if you re-enlist while you’re there, is fully tax-exempt.

Tax-exempt allowances, including the Basic Allowance for Housing (BAH), the Overseas Housing Allowance (OHA), and the Basic Allowance for Subsistence (BAS), can account for between 25% and 35% of your annual compensation. These amounts may also be exempt from state income taxes, depending on the state where you file.

The tax-exempt incentive pay you receive when you’re deployed in a combat zone or other designated area offers significant investing and saving opportunities—provided you can resist the impulse to spend it. You can use at least a portion of this pay to increase your contributions to your Thrift Savings Plan (TSP) account or achieve your other long-term goals, such as accumulating a down payment that will make it easier to buy a home.

What’s more, the incentive income you earn while you’re deployed in a designated combat zone for at least 30 days can be deposited in a Savings Deposit Program (SDP) account. It pays an impressive 10% interest on deposits up to $10,000 for each deployment, though your monthly contributions can be no more than your base pay, or, in the case of officers, an amount equal to the highest enlisted pay rate.

That super-sized interest rate ends 90 days after you return to your permanent duty station and the balance is paid to you after 120 days. However, you can deposit the amount into an account designated for retirement or education savings, such as an individual retirement account (IRA), a 529 college savings plan, or an educa­tion savings account (ESA). That way, the account value can continue to compound to help you achieve these specific goals.