Study guide
9.1 Individual Finances & Allowances
Air Force PFE Promotion Fitness Examination
Track your progress as you read
Finished sections get a check mark.
1 Introduction & Exam Overview
1.1 PFE Exam Facts & Format 1.2 The WAPS Scoring System 1.3 The Tested AFH 1 Chapters & Study Strategy
2 Professionalism (AFH 1, Chapter 1)
2.1 The USAF Professional & the Profession of Arms 2.2 The Air Force Core Values & Their Virtues 2.3 Ethical Standards & the Airman's Creed
3 Military Organization & Command (AFH 1, Chapter 5)
3.1 The United States Armed Forces 3.2 The Military Departments & Services 3.3 Military Command Structure & Combatant Commands 3.4 The Air Force Total Force 3.5 Air Force Organizational Structure
4 Enlisted Force Development I (AFH 1, Chapter 7A–7D)
4.1 Leadership Levels 4.2 The Enlisted Force Structure & Tiers 4.3 Duty Titles & Special Positions 4.4 Force Development & the Competency Framework
5 Enlisted Force Development II (AFH 1, Chapter 7E–7H)
5.1 Training Responsibilities & Upgrade Training 5.2 Professional Military Education 5.3 The Community College of the Air Force 5.4 Continuing Education & Voluntary Programs
6 Assessments & Recognition (AFH 1, Chapter 8)
6.1 The Airman Comprehensive Assessment 6.2 Performance Evaluations & the EPB 6.3 Reenlistments, Retention & Continuation 6.4 Awards & Decorations
7 Enlisted Promotions (AFH 1, Chapter 9)
7.1 Promotion Systems & Programs 7.2 Promotion Cycles & Eligibility 7.3 Preparation & Individual Responsibilities 7.4 Promotion Testing & Test Control 7.5 Evaluation Boards & Central Selection
8 Personnel Programs & Benefits (AFH 1, Chapter 11)
8.1 Benefits & Services 8.2 Leave & Authorized Absences 8.3 Military Associations & Civilian Programs
9 Finance, Manpower & Resources (AFH 1, Chapter 12)
9.1 Individual Finances & Allowances 9.2 Official Travel Expenses & Allowances 9.3 Manpower Management 9.4 Resource Management & Stewardship 9.5 Environmental Commitment
10 Developing Organizations (AFH 1, Chapter 13)
10.1 Strategic Thinking & Results Focus 10.2 Resources & Organizational Structure 10.3 Change Management & Problem Solving
11 Developing Others (AFH 1, Chapter 14)
11.1 Teamwork & Team Dynamics 11.2 Develops People: Mentoring, Coaching & Feedback 11.3 Service Mindset & Fostering Effective Relationships 11.4 Leadership: Styles, Power & Influence
12 Developing Self I (AFH 1, Chapter 15A–15C)
12.1 Accountability & Self-Management 12.2 Military Communication 12.3 Preparing to Communicate
13 Developing Self II (AFH 1, Chapter 15D–15F)
13.1 Written Communication 13.2 Spoken Communication 13.3 Electronic Messaging
14 Developing Ideas (AFH 1, Chapter 16)
14.1 What We Know: Priorities & Innovation 14.2 Cognitive Processes & Critical Thinking 14.3 Informed Decision-Making 14.4 What We Don't Know: Uncertainty & Assumptions
15 Emergency Management (AFH 1, Chapter 17)
15.1 Air Force Emergency Management, Disasters & Hazards 15.2 Preparedness, MOPP & Individual Protection 15.3 Crisis Response & Recovery 15.4 Department of the Air Force Mishap Prevention 15.5 Risk Management
16 Security (AFH 1, Chapter 18)
16.1 Integrated Defense & Force Protection Conditions 16.2 Operations Security (OPSEC) 16.3 Information Protection & Classification 16.4 Information Access, Cybersecurity & Mobility 16.5 Antiterrorism
17 Standards of Conduct (AFH 1, Chapter 19)
17.1 A Way of Life: Oaths, Standards & Off-Duty Conduct 17.2 The Law of War 17.3 The Code of Conduct
18 Enforcing Military Standards (AFH 1, Chapter 20)
18.1 The Air Force Inspection System 18.2 Individual Accountability & Corrective Action 18.3 Appropriate Working Relationships & Fraternization 18.4 Addressing Misconduct & Prohibited Behavior
19 Fitness & Readiness (AFH 1, Chapter 22)
19.1 USAF Fitness & Comprehensive Airman Fitness 19.2 The Official Fitness Assessment 19.3 Nutrition & Performance 19.4 Substance Use, Abuse & Treatment Programs 19.5 Readiness State of Mind & Resilience
20 Military Customs & Courtesies (AFH 1, Chapter 24)
20.1 Honored Traditions: Saluting, Titles & Reporting 20.2 Respect for the Flag 20.3 Respect for Individuals 20.4 Ceremonies & Events 20.5 Drill & Formation 20.6 Preserving Our Heritage
21 SJT Format & Competencies
21.1 SJT Format & Mechanics 21.2 Airman Leadership Qualities (ALQs) 21.3 Foundational Competencies & Behaviors
22 SJT Reasoning, Scenarios & Traps
22.1 SJT Reasoning Strategies 22.2 Sample SJT Scenarios 22.3 SJT Traps & Best Practices
9.1 Individual Finances & Allowances
Key Takeaways Explain This Topic AI
The 1 January annual military pay raise automatically matches private sector wage increases as measured by the Employment Cost Index for the previous year.
Pay cutoff dates generally occur around the 6th for mid-month and the 20th for end-of-month paydays.
Clothing replacement allowance-basic is paid annually between the 6th and 36th month of RegAF status, after which clothing replacement allowance-standard automatically replaces it.
Family separation allowance-temporary applies when a member is TDY away from the permanent duty station continuously for more than 30 days and dependents are not near the TDY station.
For government debts exceeding $100 the member must be notified and given a chance to repay before withholding, with narrow exceptions for imminent separation or two-pay-period collection.
Last updated: August 2026
Fiscal Fitness
AFH 1 draws the analogy directly from AFI 1-1 : "just like physical fitness is important for health, 'fiscal fitness' is equally important to overall well-being of USAF members." The two key aspects of individual financial responsibility are establishing a personal budget and effectively managing debt .
Three habits are named: review Leave and Earnings Statements regularly , file travel vouchers on a timely basis , and use the government travel charge card (GTCC) to pay for all costs related to official government travel . Official government travel is defined as travel under official orders while performing duties pertaining to official government assignments, such as TDY and PCS .
Governing references: the Joint Travel Regulation , DoD Financial Management Regulation 7000.14-R, Volume 7A , and AFMAN 65-116, Volume 1 .
Basic Pay
Basic pay is the fundamental component of military pay and typically the largest component . Annual raises are set by Congress and the President in the National Defense Authorization Act , and by federal law the 1 January annual pay raise automatically matches private sector wage increases, as measured by the Employment Cost Index for the previous year . If national emergencies or serious economic conditions affect general welfare, the President may propose that Congress instill a lower annual pay raise .
Military pay date determines length of service for pay purposes . It should generally match the date the member entered RegAF status absent prior service, but is adjusted for credit if the individual previously served in certain governmental agencies. Negative pay date adjustments may result from absence without leave, desertion, and sickness or injury due to personal misconduct .
The Leave and Earnings Statement
The LES is the DFAS Form 702 , a comprehensive statement of entitlements, deductions, allotments, leave information, tax withholdings, and Traditional and Roth Thrift Savings Plan information .
AFH 1 singles out PCS as the moment to apply increased attention to the LES, because entitlements such as BAH and COLA change when moving between duty locations — and PCSing usually occurs more frequently than a birth, marriage, or divorce.
Pay schedule. Members are paid monthly with the option to receive payments once or twice per month . A net pay advice arrives at mid-month (if receiving a payment) and the comprehensive LES at the end of the month via myPay , both created centrally by DFAS .
Cutoff dates fluctuate but generally occur around the 6th for the mid-month and the 20th for the end-of-month paydays.
Local, partial, and emergency partial payments. Local cash payments are normally only authorized for overseas areas where on-base military banking facilities are not readily available , with exceptions for classified or contingency operations . Commanders may authorize immediate cash payments up to the amount of accrued entitlement to date . Non-cash partial payments arrive by electronic funds transfer normally in two to three business days , are limited to accrued pay and allowances , and are recouped in full on the next available payday . A stateside member may receive an emergency partial payment if time sensitive and required within 24 hours due to unforeseen circumstances.
Allowances and Entitlements
The organizing principle: monetary allowances are provided when the government does not provide for that specific need. Those in government housing do not receive full housing allowances; those who are not receive allowances to help obtain commercial housing. Many allowances are not taxable — an embedded benefit of military pay.
Allowance Key rules
Basic Allowance for Subsistence (BAS) Nontaxable , offsets the cost of meals. Junior enlisted in single-type government quarters are often required to eat in government dining facilities , receive BAS, and are charged the discounted meal rate deducted from pay. Missed meals may be reimbursed when certified by the commanding officer or designee
Basic Allowance for Housing (BAH) Provides accurate and equitable housing compensation based on local civilian housing markets ; payable when government quarters are not provided . Members in privatized quarters are entitled to BAH , with a rental agreement not exceeding the BAH entitlement, paid via allotment . Members without dependents in government single-type quarters are entitled to partial BAH unless quarters exceed minimum standards for their grade. Members in single-type quarters paying court-ordered child support may qualify for BAH-differential
Overseas Housing Allowance (OHA) Cost reimbursement-based ; members are reimbursed actual rental costs not to exceed the maximum rate for locality, grade, and dependency status. Monthly OHA includes rent plus the utility/recurring maintenance allowance ; move-in housing allowance is based on average move-in costs
Family Separation Housing (FSH) Pays for added housing expenses from enforced separation from dependents . FSH-BAH equals the without-dependent BAH rate ; FSH-OHA is up to the without-dependent OHA rate
Clothing Replacement Allowance Basic : paid annually between the 6th and 36th month of RegAF status . Standard : automatically replaces basic after 36 months . Entitlement depends on the "entered on RegAF status date" in the master military pay account
Family Separation Allowance (FSA) Restricted : transportation of dependents is not authorized at government expense and dependents do not live near the permanent duty station. Temporary : member is TDY away from the permanent duty station continuously for more than 30 days and dependents are not at or near the TDY station
Station allowances outside CONUS May include temporary lodging allowance and cost-of-living allowance
Basic Needs Allowance Taxable monthly allowance for those who voluntarily apply and whose Gross Household Income and household size place them below 150 percent of Federal poverty guidelines for their location
CONUS COLA Payable to members assigned to designated "high cost" areas within the CONUS
Federal tax advantage: service members do not pay federal or state taxes on BAH or BAS , and also enjoy combat tax exclusion and fully deductible mortgage interest .
Special and incentive pays named by AFH 1: hazardous duty incentive pay, imminent danger pay, special duty assignment pay, enlisted flying duty incentive pay, and hardship duty pay-location , plus enlistment and retention bonuses .
- Deductions
- Involuntary
Involuntary deductions are payroll deductions of certain amounts of pay imposed by law.
Withholding income tax — all pay is income for federal and state tax purposes, including basic pay, incentive pay, special pay, lump-sum payment of accrued leave, and separation pay . The LES shows "FICA TAXES," "FED TAXES," and "STATE TAXES"
FICA — requires withholding of Social Security and Medicare taxes from basic pay, with matching agency taxes paid to the Social Security Administration
Federal Income Tax Withholding (FITW) — funds national programs; a member may authorize an additional monthly amount
State Income Tax Withholding (SITW) — based on the state where the member is a legal resident
Armed Forces Retirement Home — monthly deductions from regular enlisted members' pay up to a maximum of $1 , set by the Secretary of Defense after consulting the AFRH board
The $1 AFRH cap is a small number that shows up surprisingly often.
Voluntary
Discretionary allotments are controlled through myPay . Nondiscretionary allotments have limited uses: charitable contributions, loan repayments to the Air Force Aid Society, garnishment for commercial debts, and delinquent travel charge card debt . Members are not authorized to start allotments for purchase, lease, or rental of personal property. Allotments should be requested 30 days before the desired month .
Thrift Savings Plan. Established by the Federal Employees' Retirement Act of 1986 , offering advantages similar to an IRA or 401(k). Traditional contributions come out before taxes ; Roth contributions come out after income is taxed, so withdrawals are tax-free .
Members enrolled in the Blended Retirement System (enlisted on or after 1 January 2018 ) are automatically enrolled in TSP at 5 percent of monthly basic pay, beginning with the first pay period following the 60th day of service as calculated from the Pay Entry Base Date . AFH 1 records that as of January 2023 the maximum TSP contribution was $22,500 for deferred and Roth contributions, with up to $66,000 total combined — and members may not contribute more than 92 percent of basic pay so required Social Security and Medicare deductions can be made.
SGLI as a deduction. Maximum coverage is $500,000 , and members are covered by law at the maximum rate unless they decline or reduce coverage in writing . Reductions must be in amounts divisible by $50,000 . SGLI automatically insures an eligible member on RegAF status or training for an ordered period of more than 30 days . Each child is covered at $10,000 at no cost, and the member may not insure any child for less than $10,000. The military personnel section is the office of primary responsibility.
Financial Obligations and Debt
Members must pay financial obligations in a proper and timely manner , provide adequate support of a spouse, child, or relative for whom they receive support allowances, comply with court orders or written support agreements , and respond to applications for involuntary allotments within established suspense dates . The reference is DAFI 36-2906, Personal Financial Responsibility .
Handling complaints. Complaints are forwarded to the individual's immediate commander , and the complainant is notified of the referral . Commanders will attempt to respond within 15 days and must actively monitor complaints until resolved . If the complaint reflects adversely on the member, the action should be included in the unfavorable information file . If the member has separated or retired, the complainant is told the Air Force cannot assist — but AFH 1 notes that retired members' retirement pay can be garnished for child support or alimony obligations .
Government debt collection. A member who owes debts to the government does not have to consent to collection. Generally, for debts exceeding $100 , the member must be notified of pending collection and given a chance to repay before withholding . Due process need not be completed first when the member's estimated date of separation is not sufficient to complete collection and the Air Force would be unlikely to collect, or when collection can be completed within two monthly pay periods .
Waiver and remission. A waiver may be granted for erroneous payments when there is no indication of fraud, misrepresentation, fault, or lack of good faith ; DFAS rules on all waivers . Remission may be applied for by a RegAF member, a separated member, or their commander; financial hardship may be a factor , but the Air Force may not remit or cancel any debt due to non-collection of court-martial forfeiture .