Top 5 ways civilian and military pay are different

Top 5 ways civilian and military pay are different

Check out the 5 ways in which civilian and military pay are different. Here you will find out all you need to know. Read on to find out all the details!

Check out the 5 ways in which civilian and military pay are different. Here you will find out all you need to know. Read on to find out all the details!

The salary you’re offered in a job interview is generally not what you’ll take home. Understanding five key differences between your civilian paycheck and your LES can reduce the likelihood of surprises and help you pick the option that’s best for you.

When you consider a civilian job offer, it’s important to realize that after taxes and benefits are deducted, your net pay will likely be much less than the salary you were quoted. In the service, the opposite was probably true. You may have qualified for a number of allowances or incentives that made your take-home pay more than your base salary. Because of this, civilian pay can feel like taking a step backward even if the headline salary offer seems generous.

When you consider a civilian job offer, it’s important to realize that after taxes and benefits are deducted

The biggest deduction from your civilian paycheck will likely be taxes. In the military, the federal government generally only taxes base pay, and many states waive income taxes. Other military pay—things like housing allowances, combat pay or cost-of-living adjustments—isn’t taxed. In the civilian world, just a few benefits are deducted before taxes, and overall much more of your paycheck is taxable. You may be subject to federal, state and local income tax (though some states and localities charge none), Social Security tax and Medicare tax.

You may want to make a list of the allowances and special pay you were receiving in the military, and then estimate their dollar value. This can help you determine a few things. First, it will allow you to get a better sense of your total military salary—beyond base pay—which will help you figure out how much you’ll need to make as a civilian. 

You may want to make a list of the allowances and special pay you were receiving in the military,

As an active duty service member you may not have had any out-of-pocket costs for health care. As a civilian, you may need to pay monthly premiums and co-pays when you see a doctor or fill a prescription. Even if you are insured through your employer, you will likely need to contribute to your coverage, usually via a deduction from your paycheck. If your employer doesn’t offer coverage, you may need to purchase your own insurance via a state exchange or pay a tax penalty if you remain uncovered.

Finally, when you’re in the military, your pay is determined by your rank. In the private sector, however, there’s room for negotiation. Knowing how much you need to cover your living expenses with something left over is a good starting point for determining your minimum acceptable salary.

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