The 2027 Military Pay Raise Is Not Settled — What 7% vs 3.6% Is Worth to You

On July 22, 2026 the House passed its version of the annual defense bill, and the headline everywhere was a military pay raise of up to 7%. If you read that and assumed your January paycheck is already spoken for, slow down. The House passed one number. The Senate is working from a different one. Neither is law, and the difference between the two versions is worth between roughly $1,200 and $2,200 a year to a typical service member.

This is the part most of the coverage skipped, so here is the whole picture: what each chamber actually proposed, what each one is worth in your specific paycheck, and what has to happen before any of it shows up on an LES.

The two competing numbers

There is a default raise built into law. Under 37 U.S.C. § 1009(c), basic pay rises automatically each January by the increase in the Employment Cost Index. For January 2027 that automatic figure is 3.6%.

The President's FY2027 budget request asked for something bigger and shaped differently: $5.8 billion for what the budget calls a "7-6-5 percent targeted military pay raise" effective January 1, 2027. Targeted means it is not one number for everyone. The most junior members get the largest percentage.

The House Armed Services Committee backed that request. The Senate Armed Services Committee did not — its version pays the statutory 3.6% to every rank. So the two live proposals look like this:

Note that E-5 sits in the top tier alongside E-1 through E-4, which is easy to miss in the shorthand "7-6-5." The Defense Department describes the tiered proposal as averaging about 6.2% across the force.

What each plan is actually worth to you

Percentages are abstract. Dollars are not. The table below applies both proposals to the actual 2026 basic pay table for a set of common rank and time-in-service combinations, so you can see the real monthly difference and what the gap between the two chambers is worth over a year.

Two things stand out. First, the junior enlisted tiers gain the most in percentage terms but senior members still see the largest raw dollars, because the percentage is applied to a bigger base. Second, the gap between the House and Senate versions is not small change for anyone — an E-5 at six years is looking at about $1,677 over the course of 2027 riding on which version survives.

Want your exact rank and years of service instead of the examples above? Run them through the 2026 Basic Pay tables and apply your tier's percentage, or use the Promotion Pay Raise Calculator to compare pay across grades.

What else is in the House bill

The pay raise got the headline, but the House-passed bill carries a number of other provisions that touch service members directly. These are provisions in the House version — the same caveat applies, none of it is final:

• Faster transitional health care enrollment. A requirement for the Defense Department to build a process letting eligible members enroll in transitional health care within two business days.
• Reserve service counted toward time in grade. Non-regular (reserve) service could count toward time-in-grade requirements for retirement, without itself increasing retired pay.
• Air Force Academy changes. Restoring the cadet wing to its authorized strength of 4,400, requiring a strategy to improve academic outcomes, renaming the Dean position to Provost and Dean, and studying the effects of NCAA athlete compensation and the transfer portal.
• Supply chain security pilot. A pilot program to independently verify commercial electronics used across military installations.
• A Medal of Honor authorization for Vietnam War pilot Major Robert Lodge, for actions on May 10, 1972.
• A cognitive readiness pilot integrating performance training, sleep resources, and stress management.
• A proposed renaming of the Department of Defense to the Department of War.

What actually has to happen next

1. 1Conference. The House and Senate reconcile their two versions into a single bill. The pay raise is one of the specific items in disagreement, so it will be negotiated directly rather than passing through untouched.
2. 2Both chambers pass the reconciled bill. The compromise text has to clear the House and the Senate again.
3. 3The President signs it. Only then is the raise authorized. The NDAA is typically finalized in December, which is cutting it close to a January 1 effective date — that is normal for this bill.
4. 4DFAS publishes the new pay tables. The rates that matter to you appear on the DFAS pay-table page, and your LES reflects them on the first covered payday.

It is worth knowing that Congress has repeatedly set military pay above or below the automatic ECI figure, and has done targeted, paygrade-specific adjustments before. The FY2025 NDAA did exactly that: an inflation-adjusted raise for everyone in January 2025, then an additional targeted increase for junior enlisted members (E-5 and below) starting April 1, 2025. So a tiered outcome is not unusual — but neither is the final number landing somewhere between the two chambers' opening positions.

What to do with this right now

• Do not budget the 7%. Until the reconciled bill is signed, the only number you can count on is the one already on your LES. If you want to plan against something, plan against 3.6% and treat anything above it as upside.
• Do check your TSP percentage. If you contribute a fixed percentage of basic pay, a raise increases your contribution automatically. If you contribute a fixed dollar amount, it does not — and a raise is the easiest moment to increase it, because the money never hits your checking account. Model it with the TSP Calculator.
• Do watch the elective deferral limit. A larger raise means a higher percentage lands you at the IRS annual limit sooner, and maxing out early can cost you BRS matching in the final months of the year.
• Do not confuse this with BAH or BAS. Those are set through separate processes on their own schedules. A basic pay raise does not move them.

The bottom line

The House passed a 7-6-5 tiered raise on July 22, 2026. The Senate version pays a flat 3.6%, which is the automatic figure already written into law. Both are proposals. The difference is worth roughly $1,200 to $2,200 a year depending on your rank, and it gets settled in conference, most likely in December. Until the bill is signed, the honest answer to "how big is my 2027 raise" is that it is somewhere between 3.6% and 7%, and nobody can tell you more precisely than that.

We will update this page when the reconciled bill moves. In the meantime you can check your current rate against the 2026 Basic Pay tables, or see what your whole compensation package is worth with the RMC Calculator.