Editor’s note: This is the second installment of New Year, New You, a weeklong look at your financial health headed into 2025. 

It’s important to check your military Leave and Earnings Statement (LES) each month, but the January LES is more important than most.

Your January LES reflects any updates to your pay, allowances or benefits that may have taken effect at the start of the new year. You want to make sure that you’re receiving the pay and allowances at the right rates and that your deductions are set up properly. Taking a few minutes to review it can help you catch and correct any errors now, plus give you a better understanding of your income and expenses.

Here are the key items to check:

Base Pay and Allowances

First, check out your annual military pay increase. A new pay chart is voted into law each year. Effective Jan. 1, this pay increase will show up in your Jan. 15, 2025, paycheck and will be reflected on your January LES. You can read more about the 2025 pay increases here.

Next, make sure you are getting the right Basic Allowance for Housing. BAH rates are recalculated annually. But thankfully, you’re grandfathered into the old rate if your rate is lower for the new year. You will get the new rate if it is higher or if you move after the start of the year, are demoted or have a change in dependency status.

While you’re checking, make sure you’re receiving any special pays or allowances that you’re authorized.

Tax Withholding

Make sure your tax withholding looks right. Are you claiming the right state for state withholding? If your family or financial situation changed last year or you are getting a large refund or have a large tax bill, you may need to adjust your W-4 to align your withholding with your actual taxes.

Thrift Savings Plan (TSP) Contributions

Use this pay raise to increase your contributions to the Thrift Savings Plan. Consider increasing your contributions by 1%. You’ll still bring home more money, and you’ll be saving more, too. If you’re in the Blended Retirement System, be sure that you’re contributing at least 5% so you don’t miss out on any government matching funds!

This is a great time to consider whether your TSP tax election (traditional or Roth) makes sense for your financial situation in 2025. For most people, Roth is a great choice. But in some situations, a traditional IRA makes more sense.

Deductions and Allotments

Check your LES to make sure you recognize all deductions and allotments. More importantly, if you think something is being paid by allotment, make sure you see that allotment reflected on your LES. This might include dental or vision insurance, bill payments, savings or debts.

If you think you’re covered by Servicemembers’ Group Life Insurance (SGLI) or your spouse is covered by Family Servicemembers’ Group Life Insurance (FSGLI), make sure those deductions are being made for that coverage.

Remarks

The entire bottom section of your LES is reserved for remarks. This section is often overlooked, but it can contain the most important information. Do you have any debts listed? Are any changes pending to your pay and allowances? Is your location correct, and did they charge leave for the right days?

Need Help?

If your LES is confusing, help is available. Your installation has a personal financial manager or a personal financial counselor who would be glad to help. You can find them at your family support center.

If you notice discrepancies or have questions about your LES, contact your personnel folks or finance office as soon as possible. Correcting issues early is almost always easier than correcting them months later!

Understanding your LES, and verifying that everything is correct, can make a big difference in your financial readiness for the year ahead. Make it a habit to check every month. Your finances will thank you.

Related: 2025 Guide to Pay and Allowances for Military Service Members, Veterans and Retirees

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