Many new military retirees accept starting salaries that sound attractive … and then are shocked when their first (net) civilian paycheck is significantly smaller than they had expected. That's because they forgot to consider that civilian salaries are fully taxable, whereas they've been used to having a portion of their military compensation tax-exempt (subsistence and housing allowances). MOAA built the calculator below to help retiring or separating members better understand what civilian salary they'll have to earn to realize the same take-home pay they had in the military. Remember that this is just a first-level calculator. You also may need to account for civilian contributions to a 401(k) retirement plan, health insurance, and other expenses. (Please note State Tax Disclaimer)
Civilian Pay to Equal Military Take Home Pay
Civilian Pay to Equal Military Take Home Pay Definitions
- Basic Pay, Current, Monthly
- Based on grade and years of service. Go to Military Pay Charts for details. This link will open in a new window, close any new window(s) to return to the input form. NOTE: You may need to close more than one window to return to the input form.
- Housing Allowance, Monthly
- Enter monthly amount of any housing allowance. If in government provided quarters, enter 0. This amount is not taxable. Go to DefenseTravel.dod.mil Basic Housing Allowance for details. This link will open in a new window, close any new window(s) to return to the input form. NOTE: You may need to close more than one window to return to the input form.
- Subsistence Allowance, Monthly
- Enter monthly amount of any subsistence allowance. This amount is not taxable. Enter 0 if none. See the pay tables from the link under the “Basic pay” paragraph for the latest amounts.
- Special Pays, Taxable, Monthly
- Enter monthly amount of any taxable special pays such as Flight Pay, Sea Pay, Hazardous Duty Pay, ConUS COLA, etc.
- Retired Pay, Expected, Monthly
- Based on grade and years of service at time of retirement. Enter proper value based upon which of the three retirement systems (final base pay/high three/REDUX) that applies to you. If leaving service before retirement eligibility, enter 0. Go to Retirement Eligibility for details. Retired pay calculators can be found at Military Calculators. These links will open in a new window, close any new window(s) to return to the input form. NOTE: You may need to close more than one window to return to the input form.
- Tax Filing Status
- Choose your filing status. Your filing status determines the income levels for your Federal tax bracket. It is also important for calculating your standard deduction, personal exemptions, and deduction phase out incomes. The table below summarizes the five possible filing status choices. It is important to understand that your marital status as of the last day of the year determines your filing status.
Filing Status Married Filing Jointly If you are married, you are able to file a joint return with your spouse. If your spouse died during the tax year, you are still able to file a joint return for that year. You may also choose to file separately under the status "Married Filing Separately". Qualified Widow(er) Generally, you qualify for this status if your spouse died during the previous tax year (not the current tax year) and you and your spouse filed a joint tax return in the year immediately prior to their death. You are also required to have at least one dependent child or stepchild for whom you are the primary provider. Single If you are divorced, legally separated or unmarried as of the last day of the year you should use this status. Head of Household This is the status for unmarried individuals that pay for more than half of the cost to keep up a home. This home needs to be the main home for the income tax filer and at least one qualifying relative. You can also choose this status if you are married, but didn't live with your spouse at anytime during the last six months of the year. You also need to provide more than half of the cost to keep up your home and have at least one dependent child living with you. Married Filing Separately If you are married, you have the choice to file separate returns. The filing status for this option is "Married Filing Separately".
Check www.irs.gov under 'Pubs and Forms' for the latest standard deductions on the IRS form 1040 instructions.
- Number of additional dependents
- A dependent is someone you support and for whom you can claim a dependency exemption. Do not include yourself. See the current IRS form 1040 Instructions for the latest deductions.
- Where you currently file your state income tax
- Choose the state where you currently file your state income tax. We will apply an average state tax rate to your current income to estimate your state taxes. The average tax rate used includes state and local taxes, sales taxes, excise taxes, property taxes, etc.
- State Tax Disclaimer
- This calculator uses the current average state tax percentage developed by the Tax Foundation. The report is titled 'Annual State-Local Tax Burden Ranking 2019' and can be found at Tax Foundation Facts and Figures. To accurately calculate state and local taxes which vary significantly across the states is very complex. The calculator uses the above report as a source of a single percentage that can best represent each state's tax burden. It is recognized that this may be a gross approximation, but it is felt to be a proper approach for the calculator's general purpose.
- Is your basic pay subject to state taxes in your current state?
- Select 'No' only if you are sure that the state where you currently file your state income tax does not collect taxes on your basic pay. All others should select 'Yes.'
- Where you expect to file your state income tax as a civilian
- Choose the state where you will file your state income tax as a civilian. We will apply an average state tax rate to your current income to estimate your state taxes. The average tax rate used includes state and local taxes, sales taxes, excise taxes, property taxes, etc. See the disclaimer in the above state income tax description.
- Federal Income Tax rates:
- **TAXTABLE_CURRENT_DEFINITION** See the latest IRS form 1040 instructions for the latest tax rates by income. Check www.irs.gov under 'Pubs and Forms' for the latest standard deductions on the IRS form 1040 instructions.