Understanding Military Pay & the LES in a Divorce

Military Ranks & Pay Grades Explained

Before understanding how the military pays its members, you must first know the member’s rank, and the interplay between rank and pay grade.

“Rank hath its privileges,” and the military is no exception. A member’s rank determines his level of responsibility, his insignia, who salutes whom, and for the purposes of this article, how much pay she receives.

Each of the branches has their own rank structures, based upon their respective traditions. However, for purposes of both standardization across both the U.S. armed forces, as well as throughout NATO, each rank in each branch translates into a standardized pay grade.

Enlisted members have 9 pay grades, each with an E in front of their pay grade, starting with E-1, and going up to E-9. In the Army, for example, a brand new private is an E-1, while the highest enlisted rank, sergeant major, is an E-9.

Warrant Officers have 5 pay grades, from WO-1 to WO-5. They are skilled, specialty officers who rank above the most senior enlisted rank, but below the most junior commissioned officer rank. Though authorized by law, the Air Force has discontinued the use of warrant officers.

Commissioned Officers have 10 pay grades, each with an O in front of their pay grade, starting at the lowest grade O-1 (e.g. a 2nd Lieutenant or ensign), and going up to the highest O-10 (a 4-star general or admiral).

Trivia: During World War II, the military created a 5-star rank, but when the last 5-star, General Omar Bradley, died in 1981, that rank was retired.

Leave & Earnings Statement (LES)

A military member’s Leave and Earnings Statement (LES) contains a lot of information, including the servicemember's pay grade, years of service, and gross pay. But what do those numbers really mean?

Most members’ gross monthly pay primarily consists of:

• Basic Pay

• Basic Allowance for Housing (BAH)

• Basic Allowance for Subsistence (BAS).

All members will receive basic pay. All members will receive either BAH or government-furnished housing, and all will receive either BAS or government-furnished meals. And most military members receive just these three components.

Some members receive special allowances, summarized below, such as professional pay for physicians, jump or flights pay, overseas allowances, etc.

Basic Pay

Every military member receives a basic pay, with the amount varying depending upon the member’s pay grade, and then within each pay grade, the longer the member has served the higher her pay. A member receives longevity increases for every two years of service, up to a cap depending upon pay grade (e.g. an Army captain O-3 maxes out at 14 years of service, with a base pay of $7131.30 in 2020). The military pay chart has the basic pay for every pay grade and years of service.

Basic pay is subject to an annual pay adjustment (colloquially known as a Cost of Living Adjustment, or COLA), which is linked to private sector wages, measured by the Employment Cost Index (ECI). These are across-the-board raises in January each year, even if the member has not been promoted or crossed the threshold for a longevity increase.

Basic pay is reflected on a member’s Leave & Earnings Statement, and as it is taxable unless the member is deployed, on a member’s W2 and tax return.

Basic Allowance for Housing (BAH)

Pursuant to 37 U.S. Code § 403, military members who do not live in government-furnished quarters Basic Allowance for Housing to compensate them for the cost of housing at their duty station.

The amount of BAH varies by duty station, and increases based upon pay grade, and whether the member has a spouse or children (a member with dependents receives a BAH With Dependents, or BAH-With rate, and a member without dependents receives BAH-Without). See the DOD’s BAH Calculator to look up specific BAH rates. By way of example, in 2020 an E6 in Colorado Springs has a BAH with dependents rate of $1860.

Pursuant to Joint Travel Regulation Section 100201, Eligible Dependents for BAH-with are:

• Spouse (except a military spouse)

• Unmarried minor children

• Incapacitated children of any age

• Unmarried children 21-23 in college.

Dependents do not include any family members for whom the member is not required to pay support, or for whom the member is supporting, nor a former spouse to whom the member is paying alimony or maintenance.

When parents are divorced, the custodial parent receives BAH-With for the children.

A BAH Differential (BAH-Diff) allowance is paid to a member who lives in military housing or has no spouse or children living with him/her, but pays child support greater than the BAH-Diff amount. Joint Travel Regulation 100404.

Despite what the name may suggest, BAH-Diff is not equal to the difference between BAH at the with and without dependents rates, but was instead fixed at the difference between the former BAQ rates back in 1997, subject to COLAs.

The BAH-Diff rates are listed in the military pay chart, and for example, in 2020 the BAH-With for an Army Major (O-4) at Fort Carson is $2133, and the BAH-Without rate is $1896. The difference between those two rates is $237, but the BAH-Diff rate is only $196.80.

For the complete regulations governing BAH, see the Joint Travel Regulations, Chapter 10 (warning - large PDF takes a while to load). Chapter 10 was revised in August 2018, not to alter the rules, but to use plain language so it is more readable to the general public. As of November 2018, that revised chapter is available here, though in the longer term it may disappear from this location after being integrated into the main regulation.

BAH is reflected on a member’s Leave & Earnings Statement. However, since it is not taxable, it is not reflected on a member’s W2 or tax return.

Basic Allowance for Subsistence (BAS)

Pursuant to 37 U.S. Code § 402, members without meal cards receive a Basic Allowance for Subsistence, or BAS. There are two rates, one for officers ($256.68 in 2020), and a higher one for enlisted  $372.71 in 2020. A single rate applies to all officers and a separate rate for all enlisted, regardless of rank or whether they have dependents. See the current BAS rates on the DFAS web site,

More rare is the $738.78 BAS-II, payable to enlisted only who live in government quarters with no meal preparation facilities and no government-government provided meals).

For the complete regulations applicable to BAS, see the DOD Financial Management Regulation, Volume 7A, Chapter 25.

Special Pay & Allowances

Though most members receive just basic pay, BAH & BAS, a significant number will receive additional allowances in particular circumstances. Examples include members on jump status, those in special forces, sea pay, submarine pay, clothing allowances, or those receiving professional pay (e.g. doctors). Some of these are reflected as monthly allowances on the LES, others are paid annually.

Trying to outline all of the various pays would be impossible, but for those brave souls who want to try to dig into them, the military pay charts contain several pages of additional pay categories, and the regulations are set forth in DOD Financial Management Regulation, Volume 7A, Military Pay Policy & Procedures - Active Duty & Reserve Pay.

Overseas Military Pay & Allowances

Servicemembers stationed OCONUS (Outside the Continental United States) typically receive additional allowances. The more common of these are:

• Overseas COLA, which varies, depending upon rank, years of service, number of dependents, and location. See the DOD’s Overseas COLA calculator for specific rates, and the DOD Overseas COLA page for more information. By way of example, a Colonel (O-6) in Ramstein, Germany with three dependents and 22 years of service has a daily COLA of $36.48 during November 1-15, 2018.

• Overseas Housing Allowance (OHA), which is the overseas equivalent of BAH. OHA rate query & information. Although the OHA offsets rent and utilities, they are built into one allowance and not listed separately on the LES. After signing a lease, a member applies for OHA on a DD Form 2367 Individual Overseas Housing Allowance (OHA) Report.

• Per Diem (Per diem rate query) may be available, particularly if the service member is on a deployment.

• Hardship Duty Pay, particularly if the service member is deployed. This is typically between $50 and $150, depending upon location. See the DOD Financial Management Regulation, Volume 7A, Chapter 17, for rules and a chart of pay by location.

In Colorado, overseas allowances and COLAs count as income for the purpose of calculating maintenance & child support.

Military Pay During Deployments

Servicemembers who are deployed receive the same pay & allowances as in garrison, even if, e.g., they have no rent or mortgage to pay. Additionally, the four primary additional pays deployed members receive are:

• Hostile Fire Pay, which in 2018 is $225 per month (which does not change that frequently - it’s been the same rate for years). See the current rate on the military pay chart.

• Family Separation Allowance of $250 per month in 2018 (also changes rarely - the rate has been the same since 2002) once the member is away from the family for more than 30 days. See the current rate on the military pay chart, and the eligibility requirements in the DOD Financial Management Regulation, Volume 7A, Chapter 27.

• Hardship Duty Pay, which is $100 per month in Iraq or Afghanistan.

• Per Diem. The Standard On-Base Incidental Rate is $3.50 per day worldwide.

Combat Zone Tax Exclusion. If a servicemember spends any part of a month in a combat zone, all pay & allowances that months are tax-free. See the DOD Financial Management Regulation, Volume 7A, Chapter 44 for more details. While this increases the net pay available to the member, since Colorado bases its child support calculations off gross pay, the tax-free status has no effect on Colorado child support.

Can I Determine Military Pay by Looking at a W2?

No, and even block 5 of the W2 does not reflect tax-free allowances. While basic pay is taxable and reflected on the W2, most other allowances are not taxable, including BAH, BAS, OHA, etc, and are therefore not reflected on the W2. Moreover, if the member served in a hostile fire zone, no pay or allowances are taxable, and therefore not reflected on the W2.

This renders the W2 effectively worthless for purposes of determining a military member’s current or past total compensation. Simply put, there is no alternative to reviewing Leave & Earnings Statements. And since some bonuses or professional pay may be paid annually, a full year’s worth of LES’s may be required. Fortunately, military members can readily obtain their historic Leave & Earnings Statements from their local finance office.

Misc. LES Information

In addition to the more obvious data pertaining to a member’s rank, pay, etc, the Leave & Earnings Statement can be mined for other data that may be useful in a dissolution.

Pay Date. Reflects the Pay Entry Base Date (PEBD) in YYMMDD format. This is the date the member entered active duty for pay purposes. Useful for determining when the member may receive a longevity increase if there has been no break in service.

SGLI Contribution. SGLI is the Servicemembers Group Life Insurance, and while this block tells you nothing other than the fact that the member is paying the premium, it puts you on notice to inquire deeper as to amount of coverage and beneficiary.

State Taxes. This reflects the member’s state of legal residence for tax purposes useful for determining jurisdictional issues.

TSP Contributions for the current year only. If the member has contributed to the Thrift Savings Plan, but not disclosed a TSP on her sworn financial statement, this is a red flag to dig deeper.

Colorado Treatment of Military Pay & Allowances

For purposes of calculating child support and maintenance, Colorado divorce courts use a very broad definition of "gross income." In a nutshell, C.R.S. 14-10-115(5) includes all compensation the member receives, including the non-taxable allowances.

Moreover, Colorado family law courts also impute income to a service member who receives lodging or food in lieu of BAH or BAS. In re: Marriage of Long, 921 P.2d 67 (Colo. 1996), the Colorado Supreme Court decided that a member who lives in military housing pays child support and maintenance as if he/she were actually receiving BAH!

The reason? Military housing is considered an "in-kind payment," much like a company car provided by a private-sector employer. One may be able to argue for a common-sense exception, however. For example, a servicemember living in a Quonset hut may be able to convince the trial judge that it is not the financial equivalent of proper family housing or the full BAH at the with-dependents rate.

Despite the clear holding of the Long case, a child support obligor in a subsequent case tried to argue that BAH & BAS should not count as the obligor's income, but instead should be treated as a payment which reduced the child's needs, and therefore result in a much greater reduction in the obligor's child support.

The Colorado Court of Appeals rejected that effort, holding: “The housing and food allowances are intended to reimburse Young for her housing and food expenses, and thus, as Peabody admits, reduce Young’s personal living expenses. Accordingly, the allowances are part of Young’s gross income under the plain language of section 14-10-115(5)(a)(I)(X).”  In re Parental Responsibilities of L.K.Y., 2013 COA 108, ¶9.

More Information

How to Read an Active Duty Army Leave & Earnings Statement, from DFAS, which has a breakdown of every box on the LES.