Congress appears poised to fully approve a pay raise for U.S. service members, including a massive bump for junior enlisted troops, headed into 2025 as part of the annual defense policy bill.
Under the National Defense Authorization Act, which received approval in the House on Dec. 11, troops in the ranks of E-1 through E-4 will see a 14.5% raise next year, while all other service members will get a 4.5% pay bump.
The proposed pay raise now requires the full Senate's approval, which will likely occur in the coming days, and President Joe Biden's signature to become law.
The across-the-board 4.5% raise for all service members will take effect at the beginning of 2025, while the extra 10% raise for junior enlisted troops will kick in at the start of April.
With the 14.5% raise, junior troops will earn about $3,000 to $6,000 more per year, depending on rank. For example, E-1s will make $27,828 per year, compared to $24,206 now, while E-4s with at least six years of experience will make $44,107, compared to $38,368 now.
See the proposed active-duty pay charts for January-March 2025.
See the proposed drill pay charts for January-March 2025.
The pending 4.5% raise doesn't quite match service members' 5.2% increase in 2024 or 4.6% in 2023, but it still tops the 2.7% and 3% raises in 2022 and 2021, respectively.
While not as high as a House panel's initial 19.5% proposal for a junior enlisted raise next year, the compromise 14.5% raise marks a major win for younger troops who have struggled for years to afford basic necessities such as food.
2025 Veterans Pension Rates
Meanwhile, the Department of Veterans Affairs released its 2025 Veterans Pension income limits. The new limits change veterans' individual rates. The actual amount paid depends on a veteran's income; the pension payment makes up the difference.
Veterans of wartime service who are 65 or older and on a limited income may qualify for a veteran's pension without being disabled. Wartime veterans may also qualify who have a limited income and can no longer work.
For example, for a veteran with no dependents, the 2025 VA pension income limit (effective Dec. 1, 2024) is $16,956. With a spouse or child, it's $22,216.
Read More: 2025 Veterans Pension Rates and Eligibility
Basic Allowance for Housing (BAH)
Another important update for 2025 is the Basic Allowance for Housing, or BAH, which will increase by 5.4% for the second year in a row.
The Defense Department calculates BAH rates based on a uniformed service member's geographic duty location, paygrade and dependency status, along with housing costs in each local market. Each year, the department releases new BAH tables in mid-December for rates effective Jan. 1.
There is also a special type of Basic Allowance for Housing known as BAH Transit, BAH Type II, BAH Non-Locality or BAH Reserve, depending on what branch you are in and your status. You can find those updates for 2025 here.
Read More: Here Are Your BAH Rates for 2025
Other Financial Updates for 2025
Additionally, the VA has released its new rates for the Survivors Pension, also known as the "death pension," a tax-free benefit paid to eligible dependents of deceased wartime veterans. For those eligible, the VA pays the difference between your countable income and the yearly income limit that describes your situation.
Read More: 2025 Survivors Pension Rates
Finally, the 2025 dates have been released for retired military paydays. You can use this chart to mark your calendars.
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