When it comes down to it, your paycheck is your means of sustenance. It is someone else's responsibility to pay you, so it behooves you to know what you should be making. If you are ever overpaid, don't just assume that is someone's fault and your benefit. Navy dispersing will periodically run audits and find their overpayments. They will be asking for their money back...Count on it!
Being in the medical corps entitles you to special pays. These special pays are intended to keep the navy’s medical corps officers’ income “comparable” with our civilian counterparts. The navy puts out a yearly administrative message that delineates each year’s program specifics. The message is NAVADMIN 226/0X (usually sent at the beginning of the fiscal year). These special pays are in addition to Basic Pay, Basic Allowance for Housing (BAH), and Basic Allowance for Sustenance (BAS)-n.b. “pays” are taxable, “allowances” are not.
Components of paycheck:
Your pay is made up of several different components- Base Pay, Basic Allowance for Housing (BAH), Basic Allowance for Sustenance (BAS), and Special Pays (sea, flight, etc).
Base pay is paid by rank with step-wise raises given as rank and years of service increases. The Department of Defense publishes pay charts yearly. BAH levels are set by rank, location in the US, and whether the individual has dependents. BAS is given to all officers to help defray monthly food expenses. Every year Congress appropriates a “cost of living” raise (announced in the fall, takes effect Jan 1 of each year). In recent years, the raises have been targeted to specific ranks and years of service. Typically, the raises have ranged from 2.0 – 4.5%. Additionally, BAH levels have dramatically increased since 1999 due to federal legislation meant to cut out of pocket living expenses.
Medical Corps Specialty Pay
The special pays awarded to the medical corps are: Additional Special Pay (ASP), Incentive Special Pay (ISP), Multi-year Specialty Pay (MSP), Board Certified Pay (BCP), and Variable Special Pay (VSP). Some of these pays carry multi-year service agreements, and some require the service member to make yearly requests. Here is a brief synopsis:
ASP: Medical corps officers who agree to remain on active duty for one year and are not in initial internship or residency are entitled to $15,000. This is payable every year on the anniversary of graduation from internship/residency to those with a valid, unrestricted medical license. If you are just graduating from internship (and not going straight into residency) you are eligible and only need to have APPLIED for licensure. You must send a letter to BUMED each year. This is the so-called “GMO Bonus”.
ISP: Offered to Medical Corps officers below the grade of O-7 who have current, valid, and unrestricted licenses, who have completed residency prior to Oct 1, and who execute a written agreement to remain on active duty for at least one year. Amounts vary depending on medical specialty. This is payable at the beginning of the fiscal year. You must send a letter to BUMED each year. A copy of this letter can be found in the Addendum of this site.
MSP: Offered to Medical Corps officers below the grade of O-7 who have current, valid, and unrestricted licenses; who have completed initial residency before Oct 1; who have at least 8 yearsof creditable service, or has completed any active duty service commitment incurred for medical education and training; who executes a written agreement to remain on active duty for two, three, or four years. In a new program, MSP may be combined with ISP. Again, amounts vary depending on specialty. It is payable at the beginning of each fiscal year. Once a contract in entered, it may be renegotiated if desired (e.g. to take advantage of rate increases), but it does NOT require a yearly letter to BUMED. Payback requirements are complicated and listed in HA POLICY 06-016.
BCP: Like ASP, medical corps officers must agree to remain on active duty for one year are entitled to amounts ranging from $2500 to $6000 depending on years of creditable service. This is payable yearly.
VSP: Medical Corps officers on active duty receive monthly special pays ranging from $100 - $1000 depending on years of creditable service. Does not require yearly letter to BUMED.
Each hospital has a department of officer programs and your ship will have a Medical Department Division Officer. They are very familiar with all the medical corps special pays and can be a valuable source of information. They should have the required letters to send BUMED. The internet can also be a valuable tool as well.
You have access to your pay account through the MyPaywebsite. MyPay is run by the Defense Finance and Accounting Service- link to MyPay. Through MyPay, you can print your monthly Leave and Earning Statement (LES), print yearly W-2’s, change federal income tax withholdings, view status of travel claim payments, and view/change Thrift Savings Plan allocations.
An LES is your document of what, why, and how much you were paid. It is a good idea to get into the habit of printing and saving a copy, monthly.
Thrift Savings Plan
The Thrift Savings Plan (TSP) is relatively new to the active duty community. In a sense, it functions like a 401-(k) retirement plan in that contributions are made and grow in a tax-deferred status. Money is directly deducted from your paycheck before being taxed. Current limits cap your contribution to $15,500 per year. This amount can be reached by any combination of your base pay, your special pays, and bonuses. See the Thrift Savings Plan website for more information.
Money is deposited directly into one of five mutual fund-like accounts. The types of accounts are: money market fund (G), bond fund (F), foreign investment stock fund (I), Wilshire 4500 index tracking fund (S), and SP 500 Index fund (C).
The summer of 2005 saw the introduction of a new family of investment choices- the Lifecycle (L) Funds. By selecting the L fund that is closest to your desired year of actual retirement (not from the service), these funds take the decision of how to distribute your TSP investments out of your hands. These funds diversify your money across the G, F, I, S, and C funds using professionally determined mixes tailored to different time horizons.
As with any mutual fund investment, read the fund's fact sheets before investing.
Accounts may be established at any time while on active duty. You may hear of "Open Seasons" from some people. But, these "Open Seasons" have been done away with. However, you must elect to use at least 1% of your base pay to establish your account. Changes may be made anytime throughout the year. You may open an account either online through your MyPayaccount or through your dispersing office pdf enrollment form.
The enrollment form will ask what percentages of different pays you would like to contribute. The choices given are: base pay, special pay, incentive pay, and bonus pay. Even though we commonly refer to our medical corps pays as “bonuses”, the navy (TSP) considers most of them to be special pays. ASP, BCP, ISP, and VSP are considered special pays. MSP is considered a bonus. If you are receiving MSP/ISP combination, contact your payroll office for information on how this lump sum is considered. Follow this link for a complete list of what pays are considered 'bonuses', 'incentive pays', and 'special pays'.
Here is an equation to help figure out what percentages of your various pays you would like to contribute:
BP (y) + (ASP + BCP + ISP +VSP) (x) + MSP (z) = yr contribution
y- percentage of base pay at least 1%
x- percentage of special pays 0-100%
z- percentage of bonus pay 0-100%
**If you elect to contribute a large portion of your monthly special pay- VSP, make sure you check your contribution percentage before the rather large annual ISP or ASP is paid. Otherwise, you could wind up with an unexpected large TSP contribution. Once a contribution is made, it is rather difficult, if not impossible to recover that money.**
If you max out contributions for the year, TSP will automatically stop payroll deductions until Dec 1. It will then resume based on the limits you have set. Changes in payroll deduction percentages may be made online at MyPay. Changes in distributions within your TSP account may be made at anytime online. You may also visit the payroll office for more information and assistance.
The TSP program offers loans based on the cash value of your account, annuities once you retire, and roll-over assistance when you leave active duty.
When serving aboard a ship or deployed overseas, you may be eligible for several additional pays. Career sea pay is given to all officers starting the day they report aboard at a rate of $100 per month. Once an officer reaches 3 years of career sea time, the monthly sea pay increases to $260 / month. If an officer spends 3 consecutive years onboard a ship, there is a sea pay “premium” offered. Follow this link and look at page 5 for the complete sea pay chart.
Family Separation Allowance
If you have dependents and you deploy, once you are away from home for 30 consecutive days, you become entitled to Family Separation Allowance (FSA). Like all other allowances, FSA is tax free. FSA is a fixed rate for all ranks and is currently $250 / month. FSA rules are outlined here in this pdffile.
Combat Zone Pay Issues (**OLD INFO**)
President Bush and Congress are negotiating the defense bill for 2008. The bill contains increases in combat pay. More to follow when this bill is signed (written 1/5/2008).
Entering a combat zone qualifies you for imminent danger (aka hostile-fire) pay. This is paid at a rate of $225 per month. Deploying and leaving your family for over 30 days qualifies you for Family Separation Allowance at a rate of $250 per month (remember allowances are tax free).
Lastly, if you serve in a combat zone, you will receive a tax break. Your base pay, combat zone pay, and special pays received while there will be federal income tax free up to $6,300 (the maximum pay on the E-9 pay scales). If you spend one day of the month in a combat zone, your pays qualify for that month. Follow this link for more information as found in IRS Publication 3 Armed Forces Tax Guide.
If you decide to contribute to TSP while in a combat zone, you won’t receive an up fronttax benefit as the “pay” component of your income is not taxed, however, the money you contribute will grown and remain tax-free. When you take the money out at retirement, the portion you contributed while in a combat zone won’t be taxed.
Other Special Pays:
If you are a flight surgeon or an underwater medical officer, you may be eligible for additional monthly special pays. You are entitled to these pays in addition to your regular navy salary and the above mentioned special pays (ASP and VSP) if you are working in that specific capacity.
For example, a carrier surgeon who was previously a flight surgeon would not be eligible to receive flight pay since he is no longer in a flight status.
Check with your dispersing officer for more specifics.