§ 7361. Computation of retired pay

§ 7361. Computation of retired pay

(a) Computation.—

(1) Formula.— The monthly retired pay of a member entitled to such pay under this subtitle is computed by multiplying—

(A) the member’s retired pay base (as computed under section 1406(c) or 1407 of this title), by

(B) the retired pay multiplier prescribed in section 1409 of this title for the number of years credited to the member under section 1405 of this title.

(2) Additional 10 percent for certain enlisted members credited with extraordinary heroism.— If a member who is retired under section 7314 of this title has been credited by the Secretary of the Army with extraordinary heroism in the line of duty, the member’s retired pay shall be increased by 10 percent of the amount determined under paragraph (1) (but to not more than 75 percent of the retired pay base upon which the computation of such retired pay is based (except in the case of a member who served during the Vietnam era, as that term is defined in section 12731 of this title)). The Secretary’s determination as to extraordinary heroism is conclusive for all purposes.

(b) General Rules.—

(1) Use of most favorable formula.— If a person would otherwise be entitled to retired pay computed under more than one formula in subsection (a) or the table in section 1401 of this title, he is entitled to be paid under the applicable formula that is most favorable to him.

(2) Rounding to next lower dollar.— The amount computed under subsection (a), if not a multiple of $1, shall be rounded to the next lower multiple of $1.

(c) Special Rule for Retired Reserve Enlisted Members Covered by Section 7343.— In the case of a Reserve enlisted member retired under section 7314 of this title whose retired grade is determined under section 7343 of this title and who first became a member of a uniformed service before September 8, 1980, the retired pay base of the member (notwithstanding section 1406(a)(1) of this title) is the amount of the monthly basic pay of the member’s retired grade (determined based upon the rates of basic pay applicable on the date of the member’s retirement), and that amount shall be used for the purposes of subsection (a)(1)(A) rather than the amount computed under section 1406(c) of this title.

(Aug. 10, 1956, ch. 1041, 70A Stat. 232, § 3991; Pub. L. 85–155, title I, § 101(23), Aug. 21, 1957, 71 Stat. 380; Pub. L. 85–422, §§ 6(1), (8), 11(a)(5), May 20, 1958, 72 Stat. 129, 131; Pub. L. 85–861, § 1(101A), Sept. 2, 1958, 72 Stat. 1489; Pub. L. 88–132, § 5(h)(2), Oct. 2, 1963, 77 Stat. 214; Pub. L. 90–207, § 3(2), Dec. 16, 1967, 81 Stat. 653; Pub. L. 96–342, title VIII, § 813(c), Sept. 8, 1980, 94 Stat. 1104; Pub. L. 96–513, title V, §§ 502(21), (22), 512(10), Dec. 12, 1980, 94 Stat. 2910, 2929; Pub. L. 98–94, title IX, §§ 922(a)(7), 923(a)(1), (2)(F), Sept. 24, 1983, 97 Stat. 641, 642; Pub. L. 99–348, title II, § 202(a), July 1, 1986, 100 Stat. 694; Pub. L. 103–337, div. A, title VI, § 635(a)(2), Oct. 5, 1994, 108 Stat. 2788; Pub. L. 104–201, div. A, title V, § 532(d)(1), Sept. 23, 1996, 110 Stat. 2520; renumbered § 7361 and amended Pub. L. 115–232, div. A, title VIII, §§ 808(b)(14), 809(a), Aug. 13, 2018, 132 Stat. 1839, 1840; Pub. L. 118–159, div. A, title VI, § 604(2), Dec. 23, 2024, 138 Stat. 1931; Pub. L. 119–60, div. A, title XVII, § 1701(a)(35), Dec. 18, 2025, 139 Stat. 1209.)

In the introductory paragraph, the applicability of the rule stated in the third sentence to situations not expressly covered by the laws named in the source statutes above is a practical construction that the rule must be reciprocally applied in all cases.

In formula B, the words “basic pay” are substituted for the words “base and longevity pay” to conform to the terminology of the Career Compensation Act of 1949, 63 Stat. 802 (37 U.S.C. 231 et seq.). The words “his retired grade” are substituted for the words “permanent grade held at time of retirement” to reflect the right to higher retired grade when qualified under other provisions of law. 10:941a(e) (last proviso of clause (1)) is omitted, since, under section 202 of the Career Compensation Act of 1949, 63 Stat. 807 (37 U.S.C. 233), the active duty pay of all members of the Army is based upon years of service.

In formula C, the computation is based on monthly pay instead of annual pay to conform to the other formulas of the revised section. The words “basic pay” are substituted for the words “active duty base and longevity pay”, and the words “in determining his basic pay” are substituted for the words “for longevity pay purposes”, to conform to the terminology of the Career Compensation Act of 1949, 63 Stat. 802 (37 U.S.C. 231 et seq.). The words “Monthly basic pay of member’s retired grade” are substituted for the words “the rank upon which they are retired”, in 10:971, and “rank with which retired”, in 10:971b, to reflect their right to advancement on the retired list. 10:971 now applies only when the retiring officer has 30 or more years of service which may be credited in computing his retired pay. 10:971b (2d proviso) is omitted, since, under section 202 of the Career Compensation Act of 1949, 63 Stat. 807 (37 U.S.C. 233), the pay of all members is based upon cumulative years of service. 10:971b (4th proviso) is omitted as executed. 10:971b (last proviso) is omitted, since the distinction between limited and unlimited retired lists was abolished by section 201 of the act of June 29, 1948, ch. 708, 62 Stat. 1084. Sections 3918, 3920, and 3924 are included under this formula, since it achieves the same result as is reached on a basis of 30 years multiplied by 2½ percent, and simplifies the table.

In formulas D and E, the words “credited under section 3925” are substituted for the words “active Federal service”, since that revised section makes explicit the service covered. The act of August 10, 1946, ch. 952, § 6(c), 60 Stat. 996, is not contained in 10:948. It is also omitted from the revised section as executed. 10:980 now applies only when the retiring enlisted member has at least 30 years of service which may be credited in computing his retired pay. However, as noted above, 10:980 is the only provision of law applicable to cases in which the retiring member has at least 30 years of service. The act of June 16, 1942, ch. 413, § 19 (63d through 75th words of 2d par.), 56 Stat. 369, repealed so much of the act of March 2, 1907, ch. 2513, 34 Stat. 1217, as provided allowances for enlisted men on the retired list. The repeal of section 19 of the act of June 16, 1942, by section 531(b)(34) of the Career Compensation Act of 1949, 63 Stat. 839, did not revive that portion of the act of March 2, 1907, which had been repealed by the act of June 16, 1942. Accordingly, the act of March 2, 1907, as thus modified by the act of June 16, 1942, is used as the basis for formula E.

Footnote 2 reflects the long-standing construction of those provisions dealing with computation of retired pay which do not specifically provide that the member is entitled to compute his retired pay on the basis of the monthly basic pay to which he would be entitled if he were on active duty in his retired grade. Except in cases covered by formula C the pertinent basic computation provisions for such retirement either provide for computation of retired pay on the same basis as the provisions dealing with higher retired grade, or the basic retirement provisions were themselves enacted after the provisions authorizing higher retired grade. The provisos of 10:1002 and 1005 are omitted as surplusage, since no formula for the computation of retired pay includes inactive service on the retired list as a credit.

The words “at rates applicable on date of retirement and adjust to reflect later changes in permanent rates”, in footnote 2; and all of footnote 4; are based on the source statutes incorporated in the formulas to which footnotes 2 and 4 apply.

In footnote 4, the words “and disregard a part of a year that is less than six months” are made applicable to formulas A—E although this part of the rule is expressed only as to formula B, in 10:941a(e)(1). The legislative history of the Career Compensation Act of 1949 (Hearings before the Committee on Armed Services of the Senate on H.R. 5007, 81st Congress, first session, p. 313, July 6, 1949) indicates that the provisions, upon which formulas A and C—E are based, should be construed to require that a part of a year that is less than six months be disregarded.

The amendment reflects section 1(99) of the bill [amending section 3962 of Title 10].

Editorial Notes

Prior Provisions

A prior section 7361 was renumbered section 8701 of this title.

Another prior section 7361, acts Aug. 10, 1956, ch. 1041, 70A Stat. 455; Aug. 6, 1981, Pub. L. 97–31, § 12(3)(D), 95 Stat. 154, authorized Secretary of the Navy to provide for necessary salvage facilities for public and private vessels, prior to the general amendment of this chapter by Pub. L. 104–106.

Amendments

2025—Subsec. (a)(2). Pub. L. 119–60 substituted “Vietnam era” for “Vietnam Era”.

2024—Subsec. (a)(2). Pub. L. 118–159 inserted “(except in the case of a member who served during the Vietnam Era, as that term is defined in section 12731 of this title)” after “based”.

2018—Pub. L. 115–232, § 808(b)(14), renumbered section 3991 of this title as this section.

Subsec. (a)(2). Pub. L. 115–232, § 809(a), substituted “section 7314” for “section 3914”.

Subsec. (c). Pub. L. 115–232, § 809(a), substituted “Section 7343” for “Section 3963” in heading and “section 7314” for “section 3914” and “section 7343” for “section 3963” in text.

1996—Subsec. (c). Pub. L. 104–201 added subsec. (c).

1994—Subsec. (a)(1). Pub. L. 103–337, § 635(a)(2)(A), amended par. (1) generally. Prior to amendment, par. (1) contained table which provided two formulas for computing retired pay for cases covered under sections 3911, 3914, 3917, 3918, 3920, and 3924 of this title.

Subsec. (b)(1). Pub. L. 103–337, § 635(a)(2)(B)(i), struck out “of the table” after “than one formula”.

Subsec. (b)(3). Pub. L. 103–337, § 635(a)(2)(B)(ii), struck out heading and text of par. (3). Text read as follows: “Section references in the table in subsection (a) are to sections of this title.”