how is military base pay calculated 
a military member s monthly base pay is calculated based on their pay grade and the number of years of service military base pay is the military member s basic compensation excluding additional allowances base pay does not include other forms of compensation that the member receives such as the basic allowance for housing bah clothing bonuses hazard pay and cost of living adjustment cola annual increases to a member s base pay are calculated by measuring the increase in private sector wages and salaries as reflected in the employment cost index eci 3