Pay & Entitlements
Final Pay Calculator
FY2026Your last paycheck at separation or retirement — every dollar accounted for.
Estimated grand total
$0
E-5 · — YOS · —
Final pay net
$0
Leave sell-back
$0
Separation / severance
$0
Clothing allowance
$0
Your PAY DATE as shown on your LES. Drives YOS, anniversary, longevity crossing.
Used for prorated BAH. Leave blank to skip.
How final pay works
The final paycheck rolls up a lot of moving parts. Here's what to watch for so nothing surprises you.
Mid-month vs final pay
If you separate before the 15th, there's no mid-month paycheck — one settlement covers everything. Separating on/after the 15th means mid-month runs as usual, then final pay settles days 16 through your separation day.
Leave sell-back
Up to 60 days lifetime, half-day increments allowed. Paid at your final base pay rate regardless of when it was accrued. Taxed at 22% federal supplemental + state (no FICA). If you take terminal leave, that comes off the sellable balance first.
Clothing maintenance
Enlisted only. You get the FULL annual amount in the final pay if separation falls in your clothing anniversary month (same month as your Pay Date). Otherwise, you get a 1/12 monthly portion. It's non-taxable.
Tax reconciliation
Federal income tax, FICA SS, and FICA Medicare are reconciled on the final pay: DFAS calculates tax on your actual accrued wages, subtracts what was already withheld mid-month, and refunds any over-withholding. State tax isn't reconciled — you claim it on your return.
Separation vs severance vs retirement
VSP/SSB/involuntary pay are lump sums subject to VA recoupment. Combat-related disability severance is tax-free. Regular retirement (20+) pays a monthly check; TERA reduces it 1% per year short of 20. Disability severance is taxable unless combat-related.
TSP in the final month
TSP stops the month before separation — no contribution comes out of your final pay. If DFAS glitches and deducts anyway, it auto-refunds (you don't need to do anything). Your balance keeps growing based on market performance.
About this entitlement
What you need to know — straight from the regulation
What the final paycheck includes
When a service member separates or retires from active duty, the final paycheck is a composite of prorated basic pay, BAH, BAS, and any special/incentive pays through the separation date. In addition, qualifying members may receive lump-sum payments that fall under separate statutes: Separation Pay (10 U.S.C. § 1174), Special Separation Benefit / Voluntary Separation Pay (10 U.S.C. § 1174a / § 1175a), Disability Severance Pay (10 U.S.C. § 1212), and any sold-back leave under 37 U.S.C. § 501.
All separation-pay categories are administered under the DoD Financial Management Regulation (FMR), Volume 7A — Chapter 34 governs Separation Pay, Chapter 35 governs leave sell-back and severance handling, and Chapter 53 governs TSP treatment.
10 U.S.C. §§ 1174, 1174a, 1175a, 1212 · 37 U.S.C. § 501 · DoD FMR Vol. 7A, Chapters 34, 35, 53
Tax treatment of separation payments
Most separation and severance payments are taxable wages subject to federal income-tax withholding, FICA, and state tax where applicable. Federal withholding is applied per IRS Publication 15-T.
Disability Severance Pay under 10 U.S.C. § 1212 is partially or fully non-taxable when the disability is combat-related or when the member meets the criteria in IRC § 104; IRS Publication 3 describes when previously-withheld tax on disability severance can be recovered by filing an amended return.
IRS Publication 15-T · IRS Publication 3 · 26 U.S.C. § 104
Leave sell-back
Under 37 U.S.C. § 501 and DoD FMR Vol. 7A, Chapter 35, a separating or retiring member may sell back accrued leave at the member's current basic-pay daily rate, subject to a 60-day career-lifetime limit. Sold-back days do not carry BAH or BAS. Terminal leave is an alternative that keeps the member on active-duty pay (including BAH and BAS) through the separation date.
37 U.S.C. § 501 · DoD FMR Vol. 7A, Chapter 35
TSP at separation
TSP contributions stop with the member's last pay period. Distribution options (keep the account in TSP, roll to an IRA or new employer plan, or take a cash withdrawal) are governed by 5 U.S.C. Chapter 84 and the Internal Revenue Code. Early distributions before age 59½ may be subject to the 10% additional tax under IRC § 72(t), with limited exceptions for public-safety officers and members separating in or after the year they turn 55.
IRC § 72(t) · 5 U.S.C. Chapter 84 · TSP Tax Information booklet
Source & references
- Primary source
- DoD Financial Management Regulation Volume 7A; IRS Publications 3 and 15-T; DFAS payroll calendar — view official publication
- Regulatory reference
- DoD FMR Vol. 7A, Chapters 34, 35, 53 · 10 U.S.C. §§ 1174, 1174a, 1175a, 1212 · 37 U.S.C. § 501 · 26 U.S.C. §§ 72, 104
- Effective date
- January 1, 2026
- DFAS — separation pay guidance
- https://www.dfas.mil/
Military Toolkit is not affiliated with the Department of Defense, DFAS, DTMO, the Department of Veterans Affairs, or any government agency. Rates and rules on this page are pulled directly from the publications cited above. Always verify with your finance office, TMO, or the official rate page before making financial or planning decisions.
Keep going
Round out your transition plan
REF: DoD FMR Vol 7A, Chapter 34 (Separation Pay), Chapter 35 (Severance), Chapter 53 (TSP), effective January 1, 2026
DoD FMR Vol. 7A; IRS Pub 15-T; 10 U.S.C. §§ 1174, 1175a, 1212; DFAS payroll calendar
Results are estimates. Always verify with your finance office.