How Much Will Veterans’ Pay Increase in 2026?
A meaningful pay raise for U.S. service members is on the horizon, following a recent announcement by the President during the Navy’s 250th anniversary celebration. Included in the proposed fiscal year 2026 defense budget, the raise is expected to deliver financial relief and reinforce the government’s commitment to military personnel and veterans alike.
Key Highlights from the Announcement
The President outlined a 3.8% across-the-board increase in basic pay, set to take effect on January 1, 2026. This raise follows a federal formula that ties military compensation to average civilian wage growth, aiming to keep military salaries competitive in a shifting economic climate.
The announcement also included a promise of retroactive pay for service members affected by the recent government funding lapse. Delivered amid criticism of delays in Congress, the proposal received strong support from both active-duty personnel and veterans in attendance.
Timing and Eligibility
The proposed increase is scheduled to begin at the start of the new calendar year and will apply to all active-duty members of the Army, Navy, Air Force, Marine Corps, Space Force, and Coast Guard. In addition, reservists called to active duty during this period will be eligible for the higher pay rate.
While the 3.8% increase will apply universally, the Department of Defense is also exploring targeted adjustments for junior enlisted ranks. These enhancements could offer an additional boost to lower-paid service members. For veterans recalled to active duty prior to separation, prorated increases may apply, depending on the length and timing of their service.
How This Raise Compares to Previous Years
At 3.8%, the upcoming raise is slightly lower than the 4.5% increase implemented in January 2025. The reduction reflects easing inflation and moderating wage growth in the broader economy. Nonetheless, it still exceeds the expected 2026 raise for most federal civilian employees.
Military pay raises have not dropped below 2% since 2017, marking a trend of steady, inflation-aware adjustments. In recent years, lawmakers have debated more generous raises for junior enlisted ranks, though final numbers have varied depending on House and Senate negotiations. This year could follow a similar path, with changes still possible before final passage.
Historical military pay raises
| Year | Pay Raise (%) | Notes |
|---|---|---|
| 2017 | 2.1% | |
| 2018 | 2.4% | |
| 2019 | 2.6% | |
| 2020 | 3.1% | |
| 2021 | 3.0% | |
| 2022 | 2.7% | |
| 2023 | 2.7% | |
| 2024 | 4.6% | Highest in over a decade |
| 2025 | 4.5% | Reflecting peak inflation |
| 2026 | 3.8% (proposed) | Based on moderating inflation |
Budget and Funding Details
The proposed raise is included in the President’s \$1 trillion defense budget for fiscal year 2026. Alongside personnel costs, the budget allocates funding for readiness, shipbuilding, and modernization initiatives. According to internal budget documents, the pay increase follows the federal wage indexing formulas used in past years.
However, the raise is not guaranteed until Congress passes the National Defense Authorization Act and corresponding appropriations bills. Lawmakers may choose to revise the final amount or implementation schedule. If approved as proposed, the raise will also influence pension calculations, providing longer-term benefits to retired service members.
Legislative Outlook
There is broad bipartisan support for maintaining competitive military pay, but broader disagreements over defense spending priorities could slow the process. Congressional committees are expected to begin reviewing the budget request in the fall, followed by markup sessions and floor debates.
Veteran and military advocacy groups are already pressing lawmakers to approve the raise without delay. A final vote is expected by the end of the year, giving Congress time to prevent any disruption in implementation. Once enacted, official notices will be sent to service members and retirees outlining the new pay rates, eligibility details, and schedules for any back pay owed.
