I get a lot of questions about military pay for new recruits. A very plan-ahead type Delayed Entry Program (DEP) reader recently wrote to, asking what his income would look like once he entered the service.
Hi Kate! I’m currently in the Air Force DEP and I’m trying to figure out a monthly budget, could you give me an estimate on what an E-3 makes after taxes and deductions? Thanks, Cody
My answer is simple, but it is fairly accurate for most situations:
Great job planning ahead! There will be some individual details that differ based upon your situation, but generally, once you finish training, your monthly pay will look something like this:
Base Pay, E3 under two years: $1805
Total Entitlements: $2163
Federal Tax: $100 (will vary based upon when in the year you enter the service, any other income, etc.)
State Tax: depends on state
Servicemembers Group Life Insurance (SGLI): $29 (new, post 1 July rates)
Meal Deductions: usually less, but we can’t know for sure so we’ll guess it is the same as BAS: $358
Total Deductions: $611 plus state taxes
$2163-$611= $1552 (minus state taxes) divided by two paychecks per month equals about $775 per paycheck.
I strongly advise you to start saving in the Thrift Savings Plan (TSP) and/or an IRA account as soon as you enter the service. Contributions now are much more valuable than when you get older. Plus, there are tax advantages for retirement savings when you are in a lower-income bracket. You’ll quickly phase out of those tax advantages (up to 50% of retirement savings), so take advantage of them while you can!
Good luck to you!
I’m sure there are questions, or things I’ve missed, or other information that could be helpful to Cody. Please share them in the comments!