What Is Combat Pay?
Combat pay is not open only to combat soldiers. Any person enrolled in a branch of the U.S. military who is assigned to a designated hazardous area is eligible to receive combat pay. Spending as little as one hour on duty in a hazardous zone qualifies for an entire month’s combat pay.
- Combat pay is a bonus paid to military service personnel who are serving in regions that are designated hazard zones.
- The additional pay is generally not subject to federal income tax, although Social Security and Medicare taxes are deducted.
- Combat pay is factored into applications for student aid made through the Free Application for Federal Financial Aid (FAFSA) form.
Understanding Combat Pay
According to Military.com, members of the armed services qualify for combat pay if they are subject to or wounded by hostile fire or explosive mines, or on duty on foreign soil and subject to the threat of physical harm or imminent danger due to civil unrest, civil war, terrorism, or wartime conditions.
As of 2021, combat pay was $225, on top of a basic pay rate of $8,361 for a number of military ranks, including Army sergeant major, Navy master chief petty officer, and Air Force chief master sergeant.
Combat pay is generally not counted as federal taxable income. However, the recipient must still pay Social Security and Medicare taxes on the extra pay. States set their own rules for taxing combat pay. The Department of Defense (DoD) can also designate certain combat zones excluded from the tax break.
Note that this extra pay is factored into applications for student aid made through the Free Application for Federal Financial Aid (FAFSA) form, so students or parents of college students could be affected.
Military personnel with dependents also receive a monthly Family Separation Allowance (FSA) any time they are away from their families for 30 or more days.
Combat pay may be categorized as hostile fire and imminent danger pay, and are prorated for partial months. You can not receive both hostile fire and imminent danger pay at the same time.
In addition, personnel serving in combat zones can deposit up to $10,000 a year into a special savings account that pays a guaranteed 10% interest annually. This program was established during the Vietnam War.
Where Combat Pay Applies
The concept of recognizing greater risk with extra pay originated during World War II. Originally called badge pay, it was instituted to promote morale among the infantry and increase retention.
Some areas designated by the DoD as combat zones in the past, according to Militaryhub.com, include:
- Jordan, Kyrgyzstan, Pakistan, Tajikistan, and Uzbekistan
- The Federal Republic of Yugoslavia
- The Adriatic Sea
- The Persian Gulf
- The Red Sea
- The entire land area encompassing Iraq, Kuwait, Saudi Arabia, Oman Bahrain, Qatar, and the United Arab Emirates