2-½ minutes to read
Stories of service members needing food stamps abound. I’m not downplaying people with financial struggles. But there seems to be a view that poverty in the military is widespread. This lowers expectations about the salaries veterans should get in the private sector. People think someone using government help to make ends meet should be happy to make $15 per hour. How do you turn this handicap to a benefit when you negotiate salary?
The Truth About Military Pay
Most people outside the military don’t understand how our pay works. For junior enlisted, often base pay represents only half or two-thirds of their cash compensation. So even if an HR person checks military pay tables, she’s likely to come up with too low a figure.
Let’s take an example. A married E-3 with two years of service has two children. He lives off base or on a base with privatized housing. His compensation for 2017 looks like this:
|Basic Subsistence Allowance||368.29|
|Basic Housing Allowance||1,179.00|
|TOTAL – MONTHLY||$3,551.59|
|TOTAL – ANNUAL||$42,619.08|
Now to be sure, that’s below the $56,516 median income for a family of four. Yet, because the allowances aren’t taxable, he’ll pay no income taxes.
Exemptions and the standard deduction mean $28,800 of his income wouldn’t be taxable even as a civilian. If the other $18,000 were taxable, he’d have to pay $1,057 in FICA and $1,410 in federal income taxes. To stay even with his military pay, his Equivalent Civilian Salary (ECS) would have to be:
$42,619.08 + 1,057 + 1410 = $45,086.08
If he had to pay state income taxes the amount would be higher. That works out to over $22 per hour based on a 40-hour week. That’s three times the federal minimum wage and double California’s higher rate.
This doesn’t include family separation allowance and incentive pay.
Use Your Military Pay as a Base to Negotiate Salary
I tried several websites that translate from military to civilian pay. For example, USAA has one available to members. But, it calculated lower figures than what I got. I’m guessing it doesn’t adjust for allowances being non-taxable. So I put together my own that you can access here. If you have any questions let me know.
Once you have your ECS you can see how it compares to salaries for the types of jobs want. For example, let’s say you were a 91B – Wheeled Vehicle Mechanic in the Army. The median salary for a similar position in the private sector, diesel mechanic, is $50,865. Salaries range from $43,776 to $55,844. This data came from Salary.com.
The above E3 can make a strong case for higher than the minimum salary based on past compensation alone. Depending on his level of skill he may do much better.
If you were an E6, your ECS is almost $62,600. That’s higher than the maximum for a diesel mechanic. Your leadership ability qualifies you as a foreman or supervisor. So knowing your ECS will help you determine your Unique Value Proposition (UVP).
You qualify for a private sector salary similar to or higher than your military pay. If you’ve been told otherwise, re-examine your UVP. Get started now!
Were you surprised by your ECS?
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