Will There Be a 2025 Military Pay Increase?
With inflation impacting the cost of living, military service members are rightfully concerned about their pay.
Every year, military pay is reviewed, and service members hope for increases to keep up with rising expenses.
As we approach 2025, a key question on the minds of many is: Will there be a military pay increase in 2025?
Yes, they’ll be an increase, but how much is still up for debate.
For example, the 2025 military pay increase proposals vary significantly between the President’s Budget, and the current House and Senate Bills:
- President’s Budget: Requests a uniform 4.5% increase for all servicemembers based on the statutory formula.
- House-Passed Bill (H.R. 8070): Proposes substantial pay raises for lower enlisted ranks (15% for E-1 to E-4) and a 7% increase for E-5s with less than 10 years of service.
- Senate Reported Bill (S. 4638): Suggests a modest 1% increase for E-1 through E-3 ranks, citing statutory spending caps as a constraint.
Okay, let’s dive into what we know about the potential 2025 military pay raise and what factors are driving this increase, to include current legislation.
How Military Pay Increases Are Determined
Military pay increases are generally tied to the Employment Cost Index (ECI), which measures wage growth in the private sector.
Historically, the annual increase in military pay is pegged to the ECI’s wage growth number for civilian workers in the private sector.
Congress can, however, propose different rates based on a variety of factors, such as inflation, federal budgets, and defense priorities.
For example, in 2024, military personnel received a historic 5.2% pay raise, marking one of the most significant increases in over two decades.
This was largely driven by soaring inflation and rising living costs that strained service members and their families.
Projections for a Military Pay Increase in 2025: What the Data Tells Us
According to VA disability expert Brian Reese, here’s the current 2025 military pay increase estimates:
- 4.5% pay raise for troops ranked E-4 and above (including officers).
- 5.5% pay raise for troops ranked E-3 and below (only enlisted E-3 and below).
Overview of President, House, and Senate Proposals for a Military Pay Increase 2025
However, there’s some disagreement brewing that’ll need to be resolved.
Overall Military Pay Increase 2025:
- 4.5% Increase: The President’s budget requests a 4.5% pay raise for all military servicemembers. This increase aligns with the statutory formula, which is a predetermined method for calculating pay raises based on various factors like inflation and cost-of-living adjustments.
House and Senate Bill Variations Affecting Military Pay 2025, House-Passed Bill (H.R. 8070):
Section 1801: This section follows the Quality of Life (QOL) Panel recommendation. It proposes a 15% pay increase specifically for servicemembers in the E-1 through E-4 paygrades. These are typically the lower enlisted ranks, including:
- E-1: Private (Army), Airman Basic (Air Force), Seaman Recruit (Navy/Coast Guard)
- E-2: Private Second Class (Army), Airman (Air Force), Seaman Apprentice (Navy/Coast Guard)
- E-3: Private First Class (Army), Airman First Class (Air Force), Seaman (Navy/Coast Guard)
- E-4: Specialist/Corporal (Army), Senior Airman (Air Force), Petty Officer Third Class (Navy/Coast Guard)
- 7% Increase for E-5s: Additionally, there is an average pay raise of 7% proposed for servicemembers at the E-5 paygrade who have less than 10 years of service. The E-5 rank includes:
- E-5: Sergeant (Army), Staff Sergeant (Air Force), Petty Officer Second Class (Navy/Coast Guard)
Senate Armed Services Committee (SASC)-Reported Bill (S. 4638):
- Section 601: This section proposes a more modest increase, authorizing a 1% pay raise for servicemembers in the E-1 through E-3 paygrades. This includes the same lower enlisted ranks as mentioned above (E-1, E-2, E-3).
Factors Influencing the 2025 Pay Increase
Several key factors are driving the discussion around a military pay raise in 2025:
- Inflation and Cost of Living Adjustments (COLA): Inflation has been a significant factor in the decision-making process for military pay raises in recent years. Rising housing costs, fuel prices, and basic necessities have led to financial strain on military families. A pay raise is a way to ensure service members’ salaries keep pace with the civilian sector and cover increased living expenses.
- Recruitment and Retention Challenges: The U.S. military is facing significant challenges with recruitment and retention across various branches. Offering competitive pay raises is seen as one way to attract new recruits and retain skilled service members. The Defense Department has voiced concerns over personnel shortages, making a military pay raise a critical part of their strategy to maintain force readiness.
- Budget Constraints and National Defense Priorities: While military pay raises are a priority, they must compete with other defense spending needs, such as equipment modernization, healthcare benefits, and global military commitments. Congress must balance these priorities within the overall defense budget, which may affect the final percentage of the pay raise.
Potential Timeline for the 2025 Pay Increase Announcement
The military pay raise for 2025 will be part of the broader National Defense Authorization Act (NDAA), which Congress typically passes at the end of each year.
Here’s the expected timeline:
- Summer 2024: Initial budget proposals and pay raise recommendations are introduced by the Department of Defense (DoD).
- Fall 2024: Congressional debates and discussions around the NDAA and military budget.
- December 2024: Final pay raise percentage is likely to be approved and signed into law by the President.
Service members can expect the 2025 military pay increase to take effect starting in January 2025.
Who Will Be Affected by the 2025 Pay Increase?
If the pay raise is enacted, it will apply to all active-duty service members, as well as National Guard and Reserve members who receive compensation based on rank and years of service.
This means everyone from junior enlisted personnel to senior officers will see an increase in their base pay.
It’s important to note that while base pay increases are significant, they do not directly impact additional benefits such as housing allowances (BAH) and subsistence allowances (BAS), which are typically adjusted separately based on local cost-of-living metrics.
Final Thoughts
Service members dedicate their lives to the defense of our country, and a competitive and fair salary is critical to maintaining readiness and morale.
While the 2025 military pay increase is not yet set in stone, early indicators suggest another much-needed boost is on the horizon.
Stay informed, and as always, thank you for your service.
About the Author
Brian Reese is one of the world’s top VA disability benefits experts and the #1 bestselling author of VA Claim Secrets and You Deserve It. Frustrated with the VA claim process, Brian founded VA Claims Insider to help disabled veterans win their VA disability compensation faster. He has served over 10 million military members and veterans since 2013. A former Air Force officer, Brian deployed to Afghanistan in 2011. He is a Distinguished Graduate from the U.S. Air Force Academy and holds an MBA from Oklahoma State University, where he was a National Honor Scholar.
