Service leavers often compare their military pay with a civilian job offer and find the civilian salary looks higher. It often isn't, once both are put on the same basis. Military pay has features no civilian job has: a pension you don't pay for, deductions for accommodation and food taken at source, and an X-Factor already built into the published rate. The calculator above shows military take-home pay. This guide helps you put a civilian offer next to it fairly.
A worked example: a corporal and a civilian offer
Sam is a corporal on the OR-4 entry rate of £40,334. Because AFPS 15 is non-contributory, nothing is deducted for the pension, so after income tax and National Insurance Sam takes home about £32,560 a year. After the calculator's default charges for single living accommodation and food, about £3,020 a year combined, that's about £29,540.
Sam is offered a civilian job at the same £40,334. The employer runs a standard workplace pension where Sam pays 5% of salary. After tax, National Insurance and the pension contribution, Sam would take home about £30,543 a year. On take-home alone the civilian job looks about £1,000 better. But Sam now has to pay rent and food bills directly, almost certainly costing much more than the service charges. And the pension Sam is paying for is a small invested pot rather than a guaranteed income.
The pension you weren't paying for
AFPS 15 builds a pension of one 47th of your pensionable pay for each year of service, about £858 a year for Sam at this salary. Each year's amount is increased in line with average earnings while you serve. It's paid as an income for life that rises with inflation, from age 60 if you serve that long, or from State Pension age if you leave earlier. To replace that privately, a civilian would need to save a large share of salary into a pension every year, far more than the minimum workplace contribution. That gap is easy to miss because it never appeared on Sam's payslip.
The scheme also offers the Early Departure Payment, for those who leave at 40 or older with at least 20 years' service. It pays a lump sum and an income from leaving until State Pension age. For service personnel close to those milestones, staying a little longer can be worth a great deal.
Other things that change in civvy street
Some allowances and benefits disappear when you leave. Tax-free allowances, subsidised accommodation for families, free medical and dental care, and paid travel for some duties all have a cash value that a civilian salary has to cover. On the other hand, the X-Factor reflects the demands of service life, and many leavers are happy to swap it for more predictable hours and the freedom to live where they choose.
The resettlement process includes financial briefings, and it's worth using them. Ask for your pension forecast before you sign a civilian contract, so you know what you've built and what further service would add.
Check your final payslips
The last few months of service can bring payments that change your tax position: terminal leave, resettlement grants, and any lump sum under the Early Departure Payment or your pension. Some of these are taxed as income, and a large payment in your final tax year can push part of your income into the higher-rate band. Ask the pay office for a breakdown before you leave, and check the tax code on your first civilian payslip. A new employer without your P45 may use an emergency code, which is easy to fix if you spot it early.
Next steps
Choose your rank and charges above to see your military take-home pay. Then run the civilian offer through the main take-home pay calculator with its real pension terms, and use the compare two salaries calculator to see the two packages side by side.