Civilian Pay Gap Simulator
BAH and BAS are untaxed — so a civilian salary that "matches" your base pay is a pay cut. Find the salary that actually matches your military compensation, and what you need after retirement pay and VA compensation kick in.
How this is calculated
Military compensation is only partly taxable. Your base pay is taxed as ordinary income, but housing allowance (BAH), subsistence allowance (BAS), and most special pays and allowances are not. A civilian job offer that simply matches your base pay dollar-for-dollar leaves out the value of everything that was tax-free — which means it's actually a pay cut.
This calculator starts by treating your monthly base pay as fully taxable annual income. It then takes your untaxed monthly allowances (BAH, BAS, and any other untaxed pay you enter) and "grosses them up" — dividing by (1 minus your effective tax rate) — to find the pre-tax civilian salary that would be needed to net the same amount after tax. If you enter a civilian healthcare premium, that's added on top, since employer healthcare often costs more out-of-pocket than military TRICARE coverage. The sum of taxable base pay, grossed-up allowances, and the healthcare delta is your civilian-equivalent salary.
If you also enter expected retired pay or VA compensation, the calculator subtracts those from the civilian-equivalent figure to show the smaller salary you'd actually need from a new job to maintain your current lifestyle. Retired pay is treated as taxable income and subtracted directly; VA compensation is untaxed, so it's grossed up the same way your military allowances were before being subtracted.
Frequently asked questions
Why is BAH treated as tax-free income?
Basic Allowance for Housing and Basic Allowance for Subsistence are excluded from federal (and most state) income tax for active-duty members. That's real spending power a civilian salary has to replace with pre-tax dollars, which is why this calculator "grosses up" those allowances before comparing them to a civilian offer.
What effective tax rate should I use?
The default of 22% is a common planning figure for a mid-range combined federal and state marginal rate, but your actual effective rate depends on your filing status, total income, deductions, and the state you live in. If you know your actual effective rate from a prior tax return, use that instead for a more accurate comparison.
Should I quote the grossed-up number to a recruiter?
Yes — when asked about current compensation, quoting the civilian-equivalent figure (rather than just your taxable base pay) gives an accurate picture of what you're actually being paid today, including the value of untaxed allowances, which most civilian recruiters won't otherwise account for.