CAF Compensation Phase One: Key Information for Members
October 20, 2025 – Defence Stories
Estimated read time – 1:30
On August 8, 2025, the Canadian Armed Forces (CAF) announced a pay adjustment for members and introduced six additional compensation and benefits initiatives. The implementation will occur in three phases. Phase One includes the Military Factor Pay Adjustment, Canadian Forces Housing Differential (CFHD) amendments related to this, and Separation Expense enhancements. Updates on the remaining compensation and benefits initiatives will be communicated as soon as possible.
Military Factor Adjustment
Regular and Reserve Force members, including the Canadian Rangers and Cadet Organizations Administration and Training Service, will receive an increase in gross pay. This adjustment applies the Military Factor—a percentage added to base military pay to reflect the unique conditions and requirements of military service. Members will see the new pay rates and receive a lump sum payment for the retroactive increase on their mid-November 2025 pay.
Impact on CFHD
In response to the Military Factor Adjustment, the CFHD salary bands were revised effective August 6, 2025. Most members will not experience any differences in their CFHD rates. CFHD rates will be recalculated July 1, 2026, which may result in lower payments. Updates will be provided as part of the routine annual update in spring 2026.
Separation Expense Enhancements
Starting November 1, 2025, members receiving Separation Expenses may qualify for a daily food allowance of approximately $19.51 if CAF dining facility rations are not provided. All recipients will receive a transportation component of $350 per month and a miscellaneous expenses component of $200 per month. Updated claim forms and standard operating procedures will be distributed to orderly rooms.
Additional Information and Support
The CAF continues to align compensation policies with military operational requirements. Members can access financial planning resources through SISIP Financial to support financial decision-making during this transition. Additional information and frequently asked questions can be found at Improvements to compensation and benefits for the Canadian Armed Forces. Members seeking clarification should contact their Chain of Command.