Last Updated: November 14, 2026 Reading Time: 7 min

Military medical retirement pay under Chapter 61 uses two formulas, and DFAS pays whichever one comes out higher. One multiplies your retired pay base by your disability rating. The other multiplies it by 2.5% for each year of service (2% under the Blended Retirement System). The rating side is capped at 75% of the base, and the years side passes 75% only with more than 30 years of service.

Below is how each formula works, worked 2026 examples from E-4 to O-3, and the 50% minimum that applies while you are on the temporary list.

The Two Chapter 61 Formulas, Side by Side

Both formulas start from the same number: your retired pay base. For most members who joined after September 7, 1980, that is the High-36, the average of your highest 36 months of basic pay. The months don't have to be in a row. For regular-component members with less than 36 months of active service, the base is total basic pay divided by the months served. Reserve-component members have separate rules. Allowances such as BAH and BAS are not part of it.

The two multipliers:

Formula Multiplier Example: 10 years, 40% rating
Disability rating Your DoD disability percentage at retirement 40%
Years of service 2.5% × years of service 25%
What DFAS pays The higher of the two (rating capped at 75%) 40%

The 2.5% figure is the legacy High-3 multiplier. Under the Blended Retirement System (BRS), the years side uses 2% per year instead. Anyone who joined on or after January 1, 2018 is under BRS, so the E-4 and E-5 examples below would use 2% on the years side. The rating still wins for both.

Which rating counts

The percentage in the first formula is the rating the Physical Evaluation Board (PEB) assigns when it finds you unfit. The PEB rates only the conditions that make you unfit for duty. Your VA rating covers every service-connected condition, so the two numbers can differ. Chapter 61 pay uses the DoD rating.

Who gets Chapter 61 retirement at all

You generally retire under Chapter 61 if the PEB finds you unfit and rates you at 30% or higher, or if you already have 20 years of service. Other conditions apply too, such as the disability being permanent and stable and not the result of intentional misconduct or willful neglect. Below 30% with fewer than 20 years, you usually separate with disability severance pay instead of retired pay. Severance is a one-time payment on a different formula and isn't covered here.

Worked 2026 Examples by Rank

These examples use 2026 DFAS monthly basic pay at each grade and years of service as a stand-in for the High-36. Your real High-36 includes older, lower-paid months, so for most careers each figure runs high. Figures are monthly and gross, before taxes, SBP and any VA offset. They show the formula result to the cent. The law rounds the payable monthly amount down to the whole dollar (10 U.S.C. 1412), so the E-4 row pays $1,044.

Member 2026 basic pay (High-36 proxy) Rating Years × 2.5% (legacy) Higher (rating capped at 75%) Monthly retired pay (PDRL)
E-4, 3½ years $3,482.40 30% 8.75% 30% $1,044.72
E-5, 7 years $4,110.00 40% 17.5% 40% $1,644.00
E-6, 13 years $5,043.30 30% 32.5% 32.5% $1,639.07
E-7, 17 years $6,000.90 70% 42.5% 70% $4,200.63
O-3, 9 years $8,125.50 100% 22.5% 75% (cap) $6,094.13

Grade cells come from the DFAS "over N years" columns: E-4 over 3, E-5 over 6, E-6 over 12, E-7 over 16, O-3 over 8. You can check any of them on the rank pages for E-4, E-5, E-6, E-7 and O-3.

Three rows show how the rules interact:

  • In the E-6 row, years of service win. Thirteen years at 2.5% is 32.5%, more than the 30% rating. The rating side alone would pay $1,512.99. The years side pays $1,639.07. If this E-6 opted into BRS, the years side is 26% (13 × 2%), so the 30% rating wins and pays $1,512.99.
  • In the E-7 row, the rating wins. Seventeen years would give 42.5%, or $2,550.38. The 70% rating pays $4,200.63.
  • The O-3 row hits the cap: a 100% rating is held to 75%.

The TDRL 50% Minimum

If you otherwise qualify for disability retirement but your condition isn't stable yet and may be permanent, you go on the Temporary Disability Retired List (TDRL) instead of the permanent list (PDRL). While you are on the TDRL, your retired pay is at least 50% of the base, whatever your rating.

Member Formula result TDRL pay (50% minimum) Pay if moved to PDRL at the same rating
E-4, 3½ years, 30% 30% $1,741.20 $1,044.72
E-5, 7 years, 40% 40% $2,055.00 $1,644.00
E-6, 13 years, 30% 32.5% $2,521.65 $1,639.07

When the formula already pays 50% or more, as in the E-7 and O-3 rows above, the TDRL floor changes nothing.

You are re-examined at least once every 18 months while on the TDRL, and you can stay on the list for no more than three years. At the final exam, the PEB either moves you to the PDRL at a permanent rating, returns you to duty, or separates you. Budget for the drop from the TDRL floor to the PDRL figure. For the E-4 above, that is a cut from $1,741.20 to $1,044.72 a month if the rating stays at 30%.

What Comes Out Before It Reaches Your Account

Several deductions can come out of the gross figure.

VA compensation offset. With fewer than 20 years, you can't collect full Chapter 61 retired pay and full VA disability compensation at the same time. Your retired pay is reduced dollar for dollar by the VA payment. Combat-Related Special Compensation can restore some of it for combat-related conditions. Our CRDP and CRSC guide has the eligibility table, including the 20-year rules for Chapter 61 retirees.

SBP premiums. If you elect the Survivor Benefit Plan, the premium comes out of retired pay.

Taxes. Federal income tax treatment of disability retired pay depends on your service history and the disability. Check with your finance office or a tax professional before you count on a tax-free amount.

Calculate Your Retirement Income

The Military Retirement Income calculator estimates retired pay for 20 to 40 years of service alongside VA compensation. It doesn't model Chapter 61 yet, so use it for the VA compensation figure and work the disability formula above by hand.

For the nondisability version of the same math, see military retirement pay at 20 years by rank. If you are going through a divorce, Chapter 61 pay is split differently from regular retired pay. Our Chapter 61 divorce guide covers which part a court can divide.

Frequently Asked Questions

How is military medical retirement pay calculated?

Take your retired pay base, usually your High-36 average of basic pay. Multiply it by whichever is higher: your DoD disability rating, or 2.5% for each year of service (2% under BRS). The rating side is capped at 75% of the base.

Can I get more than 75% of my base pay in a medical retirement?

Not on the rating side: a 100% rating pays 75% of the retired pay base. The years-of-service side passes 75% only for members who retire with more than 30 years of service.

Does my VA rating set my Chapter 61 retired pay?

No. Chapter 61 pay uses the rating the Physical Evaluation Board assigns, which covers only the conditions that made you unfit. Your VA rating can be higher and sets your VA compensation, which is a separate payment.

What do I get on the TDRL?

At least 50% of your retired pay base while you are on the temporary list, even if your rating is lower. When you move to the permanent list, the pay becomes the higher of your rating or the years-of-service percentage, which can be less than 50%.

When does years of service beat the disability rating?

When 2.5% times your years is more than your rating. With a 30% rating, that happens after 12 years. With a 50% rating, it takes more than 20. At the BRS rate of 2% a year, it takes more than 15 and more than 25 years.

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