How are annual pay raises calculated?
A. Annual military pay raises are linked to the increase in private sector wages as measured by the Employment Cost Index. In the 1990’s, the annual military pay raise was capped at one-half percent below private-sector growth unless specifically granted a larger increase by Congress. The FY2000 National Defense Authorization Act directed that pay raises for 2000 through 2006 would automatically be one-half percent above the private-sector wage increases. Pay raises beginning in 2007 are equal to the increase in the ECI. Pay raises may exceed these automatic levels if authorized by Congress. In January 2009, the military pay raise was 3.9%.
