If you have been waiting patiently for the official word on your 2026 paycheck, you can finally stop refreshing the Reddit feed. The numbers are in, and for the vast majority of the force, the news is pretty good, if less exciting than the last two years. As of early December 2025, the National Defense Authorization Act (NDAA) conference report has confirmed a 3.8% pay raise for active duty and reserve troops. It does track with civilian wage growth, even if it does not quite match the historic highs of the past three years.
But if you look past the headline percentage, the 2026 financial landscape is a different entity entirely. From a potential overhaul of junior enlisted pay to a TRICARE price hike that is quietly John Wick’ing your wallet, here is the no-nonsense breakdown of what is hitting your bank account next year.
The Base Pay: 3.8% (The “Standard Issue Raise”)
Let’s start with the confirmed target. Effective January 1, 2026, base pay will increase by 3.8% across the board. This number is locked in the final conference version of the defense bill announced on Dec. 7, 2025. Is it the 5.2% we saw back in 2024? No. But considering the historical average usually hovers closer to 2.5%, a 3.8% hike is designed to keep military purchasing power competitive with the private sector.
What does this mean for an E-5 with six years of service? It will translate to roughly an extra $134 per month before taxes. It won’t buy you a new Mustang (Hey! Please do not finance a Mustang at 30% APR), but it will help offset the price of beef.
The Wild Card: The Junior Enlisted “Stimulus”
Here is where the briefing gets interesting. While the 3.8% is locked and loaded, Congress, much like the late Steve Irwin, is currently wrastling with a much bigger animal: a targeted pay restructuring for grades E-1 through E-4, crikey. The House and Senate have both pushed for a targeted boost that could raise the total pay for junior troops by up to 15%, helping relieve the need for junior families to use food stamps to survive.
Before you PFCs start ordering bottle service at the club, understand that this is still in the “fog of war” phase. While the intent is there in the drafts, implementation is always the enemy. There is a strong chance this could be a “split raise,” where the standard 3.8% hits in January, and the targeted bonus (“the rest of the 15%”) doesn’t kick in until later in the fiscal year. Watch your Leave and Earnings Statement (LES) closely. Until you see that code on the printout, treat that extra cash as rumor, not as a resource.
Retirees & VA: The 2.8% COLA
For our veterans who have already hung up the uniform, the news is steady as she goes. The Social Security Administration confirmed a 2.8% Cost of Living Adjustment (COLA) effective Dec. 1, 2025. In case you are wondering, Soc Sec COLA applies to military pensions and VA disability compensation as well.
If you are rated at 100% disability (veteran only), your monthly payment is going from roughly $3,877 to almost $3,986. It is welcome, but let’s be honest: after the inflation we’ve had shoved down our throats since 2021, that extra money feels more like a band-aid on a bullet hole.
The Schoolhouse Rock (GI Bill, VR&E, & Chapter 35)
Now, if you are currently trading your uniforms and PT formation for a hoodie and sitting in a classroom, listen up. The education benefits do not follow the standard January 1st COLA timeline. The VA and DoD love to make things complicated, so here is the breakdown of what your stipend looks like as of Dec. 9, 2025.
First, address the most common misconception we see in the comment sections and emails: Your Post-9/11 GI Bill (Chapter 33) Monthly Housing Allowance does NOT go up on January 1. Even though the active duty BAH rates change in January, the VA does not update the MHA rates for students until August 1, 2026, the start of the new academic year. You are locked into the 2025-2026 academic year rates until next summer. Currently, the private school cap sits at roughly $29,920 per year, and online-only students are capped at $1,169 per month, which is half the national average.
However, if you are using VR&E (Chapter 31), your subsistence rates actually bumped up back on Oct. 1, 2025. If you haven’t checked the new pay scales, please be careful. As of Oct. 1, the full-time rate for a veteran with no dependents is $812.84 per month. If you have two dependents, that jumps to $1,188.15. Remember, if you are eligible for the Post-9/11 GI Bill, you can usually elect to get paid the Chapter 33 Post 9/11 BAH Rate (based on the zipcode of the school you attend) instead of these subsistence numbers, which is almost always more money.
For the spouses and kids using Chapter 35 (DEA), your rates also shifted at the start of the fiscal year on October 1. The full-time student rate is $1,574.00 per month. If you are going three-quarters time, that drops to $1,244.00. Finally, for the few of you still rocking the Montgomery GI Bill (Chapter 30), maybe you bought in for that $1,200 fee back in boot camp; your rates are effectively $2,518.00 a month for full-time enrollment as of Oct. 1, 2025.
Side note: The Supreme Court recently ruled in favor of Rudisill v. McDonough (April 2024), whoever paid their $1200 for Montgomery GI Bill and then forfeited it in order to obtain Post 9/11 benefits was not required to, and that it was illegal. Therefore, those affected will have time added to their educational benefits.
TRICARE and Housing
You didn’t think you were getting a raise without also getting a headache, did you? The 2026 updates come with a few roadbumps. The cost of convenience is going up at the pharmacy. If you use TRICARE Home Delivery for brand-name drugs, your copay is jumping from $38 to $44 for a 90-day supply. It is a subtle increase, but like a pebble in your shoe, you will feel it over time.
Then there is the housing situation, which finally got some much-needed clarity today. The Department of Defense released the 2026 Basic Allowance for Housing rates on December 11, 2025, confirming an average increase of 4.2% across the force. While the Pentagon is planning to deal out approximately $29.9 billion in housing allowances next year, you should probably hold off on browsing Zillow for an upgrade. That average increase varies widely by zip code; what this means is that troops in high-cost blast zones like San Diego or Norfolk might see a significant increase to match local rents, while others might see the needle barely move.
A raise is only good if the numbers check out. Do not wait until mid-January to find out if DFAS got it right. Check your MyPay account around December 19-20. That is usually when the “January 1” preview LES loads into the system. Always verify and constant vigilance; routinely go over your base pay for the month, check your tax withholdings, and for the love of all that is holy, make sure your allotments are still correct and updated. 2026 is bringing more money to the pipeline, but as always, it is on you to manage the logistics… please don’t pay 30% interest on that Mustang!
