Improvements to compensation and benefits for the Canadian Armed Forces
On August 8, 2025, the Government of Canada announced improvements to compensation and benefits for Canadian Armed Forces (CAF) members, to be rolled out over the subsequent 12 months. Updates will be announced by CANFORGEN and appear on this webpage as they become available.
Military Factor adjustment
CAF members saw a significant, pensionable wage adjustment retroactive to April 1, 2025. This adjustment is a result of the modernization of the Military Factor: a percentage added to the base salaries of CAF members. The Military Factor is designed to appropriately compensate CAF members for the unique and demanding nature of military service. It accounts for the personal limitations and liabilities they accept, such as reduced personal freedoms under the Code of Service Discipline; frequent and often unpredictable separation from family due to operations, deployments, and training; and the financial uncertainty of geographic postings. It also reflects the expectation of 24/7 availability and the enduring physical and mental rigours of service to keep Canadians safe.
The Military Factor adjustment represents the following increase to the gross pay of CAF members, for the Reg F and Res F, including the Canadian Rangers and Cadet Organizations Administration and Training Service:
13% – Regular and Reserve Force members in the ranks of Sailor/Private/Aviator, Pay Increment 2 to Commander/Lieutenant-Colonel, including general service officers, pilots, and medical, dental and legal officers.
8% – Regular and Reserve Force general service officers in the ranks of Captain(Navy)/Colonel and above.
Additionally, the entry-level salary for members in the rank of Sailor/Private/Aviator at Pay Increment 1 was adjusted as follows:
20% – for Regular Force and 13% for Reserve Force members.
For example, the starting salary for a Private, Pay Increment 1 (Regular Force) increased from $3,614 a month ($43,368 yearly) to $4,337 a month ($52,044 yearly).
Update: Members saw these new rates of pay and receive their lump sum payments for the retroactive increases on their mid-November pay.
Useful links:
Questions and answers about the Military Factor adjustment
Q1. What are the military factors and how were they adjusted?
CAF members have their base pay benchmarked to the civilian Public Service, which ensures that CAF members benefit from the results of collective bargaining, despite not being able to unionize.
The military factor is a percentage added to the base pay of CAF members to account for certain challenges and stressors and the demands of military service.
The military factors are applied to officers and non-commissioned members and have increased between 13% and 15% percent, depending on the group. Learn more: Understanding military pay
Q2. When will members see the wage adjustment and retroactive pay in their bank accounts?
Members received their wage adjustment and retroactive pay on their mid-November 2025 pay.
Q3. Why aren’t Officer Cadets and Naval Cadets receiving a 20% increase similar to entry-level Regular Force Pte/Avr/S3?
The rates of pay for Officer Cadets and Naval Cadets (OCdt/NCdt) are set by Treasury Board using a different method from other ranks. They calculate how much Cadets would normally pay for food and housing (about 35% of their pay) and add more for other living costs. Also taken into consideration is the fact that OCdt/NCdt in the Regular Officer Training Plan program have tuition, books, and other school-related costs covered, and that their income and time is pensionable, which is of great advantage when an officer retires.
Q4. Why are new Res F members not receiving the 20% increase along with their Regular Force counterparts?
In recent years, the CAF has made targeted adjustments to Res F entry-level pay to ensure it remains competitive and aligned with federal compensation standards. These adjustments were informed, in part, by federal minimum wage guidelines.
As the Res F entry-level pay had already been adjusted in recent years—in some cases at a faster rate than the Reg F—the current increase for Res F Privates is lower, at 13%. This is not a reduction, but rather a continuation of efforts to maintain fair and balanced compensation across both components.
Q5. How will the retroactive adjustments be applied to benefits for released members?
CAF Pay and Benefits (if release date is on or after April 1, 2025)
Pay, allowances and other benefits (such as leave cashouts) linked to CAF salary will be readjusted automatically, and funds transferred directly to the bank account on file.
Canadian Forces Severance Pay will be readjusted separately in the months following the pay increase.
Tax Slips (T4)
T4s will be issued automatically from the province of Ontario when released CAF members are entitled to a CAF retroactive pay increase. Regardless of where released CAF members may have served previously, the Release Benefits Administration (RBA) pay office located in Ontario is considered their final employment location for tax purposes.
Veterans Affairs Canada benefits
Once changes have been made to the Pension Benefits (Canadian Forces Superannuation) and the Canadian Armed Forces Long Term Disability (CAF LTD) benefits, Veterans Affairs Canada (VAC) will recalculate a former member’s Income Replacement Benefit (IRB).
A letter will be sent to the former member if there are any changes to their Financial Benefits. Please refrain from reaching out to RBA for a status update as this organization cannot provide any updates on VAC processes.
Pension Benefits – Canadian Forces Superannuation Act
If you were released from the CAF on or after April 1, 2025, your pension may increase due to retroactive pay raises. These pay adjustments affect how your pension is calculated.
Pension recalculations will only begin once the updated salary levels are fully processed in the CAF pay system. It may take over a year for these retroactive pension changes to be reflected in your payments. Patience is appreciated as these updates are implemented.
CAF Long-Term Disability
Long-term disability benefits are often based on a percentage of the member's salary. As retroactive pay increases result in higher salary levels being used to calculate disability benefits, this will lead to increased disability payments for affected individuals.
CAF LTD relies on updated information on an affected member’s pension benefits before proceeding with LTD readjustments.
As the CAF LTD benefits are managed separately, additional work needs to be done to institute these adjustments. The timeline for the retroactive adjustment to the CAF LTD cannot be determined at this time.
To verify your entitlements under CAF LTD, you may contact SISIP Financial by telephone at 1-800-267-6681 during regular business hours (8:00 a.m. to 4:30 p.m. Eastern Time).
Q6. If a member was deployed during the time covered by the retroactive wage adjustment, how will tax exemption be applied?
As per Canada Revenue Agency direction, after December 2023, in the case of a member who receives a retroactive pay adjustment for a period when they were subject to tax exemption, only the amount earned while deployed will be tax-exempt.
Example #1. A member was deployed on OP REASSURANCE from January 15, 2025, to June 15, 2025. The value of the retroactive pay earned between April 1, 2025, and June 15, 2025, will be subject to tax exemption.
Example #2. A member is deployed from July 1, 2025, to December 1, 2025, and the retroactive pay is posted on their pay account on November 15, 2025. Only the portion of the retroactive pay earned from July 1, 2025, to November 15, 2025, will be tax-exempted. All other earnings, from November 15, 2025, to December 1, 2025, will be tax-exempted, inclusive of the new rates of pay.
In all cases, a member may only be tax-exempt up to a maximum monthly amount equivalent to the highest level of pay earned by a Lieutenant-Colonel (General Service Officers) in the CAF.
Canadian Forces Housing Differential amendments
Canadian Forces Housing Differential amendments
Canadian Forces Housing Differential (CFHD) rates are based on a comparator value representing the difference between rental costs (for a two-bedroom apartment) at the place of duty to which a CAF member is posted and a percentage of the member’s monthly rate of pay.
The CFHD employs an equitable, rather than equal, approach, in that it is focused on lower-salaried members in more expensive locations. The policy aims to assist members posted to locations where their salaries cannot cover their housing costs, so that no CAF member feels unreasonably financially burdened due to the affordability of housing at their work location.
Update: The salary bands for the CFHD pay levels have been adjusted effective August 6, 2025 (the Treasury Board approval date). With this update, the vast majority of members should not notice any change in the amount of CFHD paid.
It is important to note that on July 1, 2026, CFHD rates will be affected by the pay increase. This is when the CFHD rates will be adjusted as part of the normal, annual process ensuring that the program remains responsive to economic conditions and adheres to the approved methodology.
The calculation used for the rates on July 1, 2026, will use the new pay rates, which will result in a drop in the CFHD paid to members. These new CFHD rates will be communicated as part of the cyclical update in the spring of 2026.
Members are encouraged to refamiliarize themselves with the CFHD policy and methodology laid out in the links below.
Useful links:
Questions and answers about the Canadian Forces Housing Differential amendments
Q1. How is the Canadian Forces Housing Differential affected when there is a retroactive pay increase?
As a result of the pay adjustment, the CFHD pay levels at CBI 205.453(7) were updated effective August 6, 2025. This is to ensure that following the pay adjustment, the majority of members will not be removed from their pay level, which would cause a reduction or disentitlement. There will be no retroactive changes to CFHD before August 6, 2025, Treasury Board approval date. In exceptionally rare cases, members may see a reduction in CFHD.
As part of the annual review process, CFHD rates will be adjusted on July 1, 2026, to reflect the changes in members’ salaries and market conditions. These adjustments are a normal part of the CFHD rate calculation and ensure the program remains responsive to evolving economic and financial conditions.
On July 1, 2026, members should expect a decrease in their CFHD rate as a result of the increase to their gross monthly salary.
Separation Expense enhancements
When a CAF Reg F member is posted to a new location and cannot be accompanied by their family, they may proceed unaccompanied and be eligible to receive Separation Expense (SE) to help offset the additional costs associated with living apart and maintaining a second accommodation.
Update: Effective November 1, 2025, members in receipt of SE may now be entitled to a food allowance of approximately $19.51/day if they are not being provided with free rations at a CAF dining hall. Additionally, all members in receipt of SE will receive the new transportation component of $350/month and the new miscellaneous expenses component of $200/month.
Orderly rooms will be provided an updated claim form and standard operating procedure (SOP) in due course.
Useful links:
Questions and answers
Q1. What is SE?
SE provides compensation to offset the costs of maintaining a temporary accommodation at the new place of duty when a member proceeds on a posting unaccompanied by their dependents. This includes members who are on an approved “Imposed Restriction” status. The benefit is available to Regular Force members and to Reserve Force members who are moved for a period of Class “C” Reserve service.
Q2. What are the changes?
As part of recent updates, SE now includes three new components to help offset the cost of living for members who are entitled to receive it:
- A food component, either:
- free rations at the local CAF dining hall for members living in quarters, or
- in any other case, a daily food amount equal to the national average daily basic food cost for CAF dining halls;
- A transportation component of $350 per month; and
- A miscellaneous living expenses component of $200 per month.
Q3. When will the change take place?
Members currently receiving SE will automatically become entitled to the new components (food, transportation, and miscellaneous living expenses) starting November 1, 2025. The benefit will continue to be administered through a claims-based system.
Updates to procedures and required supporting documentation will be communicated accordingly. Members will not be required to provide any receipts for the new components of the benefit.
Instructor Allowance
While the CAF has made many improvements to the recruiting process, and is already seeing results, training is more important than ever. Attracting and retaining skilled instructors and fully staffing training establishments is a strategic investment in Canada’s defence capabilities. The CAF will be introducing an allowance for instructors and training support staff at certain recruit and entry-level training establishments, to recognize the demanding work of those who must train new members up to their occupation’s basic qualifications. CAF training not only instructs CAF members in the military skills common to all occupations, it develops the mental and physical resiliency necessary to excel in the diverse and challenging environments that CAF members face in service to Canada.
All members posted to a designated training school establishment will receive $300/month. Instructors at Canadian Forces Leadership and Recruit School (CFLRS) will receive an additional $35/day they instruct, while instructors at other establishments will receive an additional $20/day they instruct.
The Instructor Allowance is intended for those personnel assigned to instruct at a designated unit whose primary function is the delivery of basic military and basic military officer qualifications (BMQ and BMOQ), initial occupation training, or environmental training linked to the first developmental period (DP1). The allowance is intended to incentivize and reward not only instruction by these personnel, but the additional support they give to recruits undergoing training at these entry-level establishments, and exposure to conditions including elevated stress and workload. The Instructor Allowance does not apply to Military Colleges. For more information, members should contact their chain of command
Questions and answers
Q1. To whom does the Instructor Allowance apply?
The Instructor Allowance applies to Regular Force members and Reserve Force members on Class “B” or “C” service who are posted, attach-posted, or on temporary duty to a designated unit (not as a student or candidate) and who report for duty at that unit. This includes both instructors and support staff. Members who meet these conditions receive a monthly allowance of $300, pro-rated if they are assigned for less than a full month.
In addition, a daily rate is available to members who are formally assigned to and responsible for delivering approved instruction or training. This allowance is not automatic; it applies only on days when the member actually provides instruction. There are two tiers:
Tier 1 ($35/day) for instructing the Basic Military Officer Qualification (AIOX) or Basic Military Qualification (AINT) at CFLRS, provided the instructor holds the General Military Training Instructor Course (AHCS) qualification.
Tier 2 ($20/day) for instructing DP1 courses at designated units other than CFLRS.
Q2. Does this allowance apply to instructing outside Canada?
No. The allowance does not apply to members who are posted, attach-posted, deployed, or tasked to instruct outside Canada, including those participating in instructor exchange programs abroad.
Q3. What is “Developmental Period 1” and which courses are included in it?
For the purposes of this allowance, DP1 refers to the initial phase of a member’s professional development in the CAF. This phase focuses on achieving occupational employability and consists of:
- Basic Military Qualification (BMQ) or Basic Military Officer Qualification (BMOQ)
- Environmental Qualification; and
- Basic Occupational Qualification for the member’s trade.
The exact courses vary by occupation and are listed in the general and occupational specifications maintained by Director Personnel Generation Requirements.
Q4. What units and training establishments will be eligible for the allowance?
To be designated by the approving authority, a unit must be a dedicated school or training establishment whose primary function is the continual delivery of instruction or training to CAF members, specifically DP1 courses. The unit must maintain a high operational tempo in conducting DP1 training and have an establishment composed primarily of instructor and support positions that directly contribute to the delivery of training.
Units such as military colleges, language schools, operational training units, or any other units, formations or elements whose primary function is not the continual delivery of DP1 training do not fall within the scope of this benefit, even if they deliver DP1 instruction.
Critical Occupation Recruitment Allowance
While the CAF met its overall recruiting goal in the last fiscal year, it continues to face a critical shortage of personnel in occupations essential to operational readiness and capability. The CAF will ensure it brings the right people into those occupations that are deemed critical, by offering allowances upon entry and at key points early in their career. Members will receive $10,000 upon completion of basic training, $20,000 once qualified in trade, and $20,000 upon completion of six years of service and a commitment to serve an additional three years.
For the current list, please see Life in the Forces | Canadian Armed Forces.
Questions and answers
Q1. Who qualifies for the Critical Occupation Recruitment Allowance?
People who, for the first time, enroll or component transfer into a Regular Force non-commissioned member occupation that is deemed critical as of November 1, 2025, are eligible for the Critical Occupation Recruiting Allowance. Please note that occupations will be considered critical when the trained effective strength of the occupation falls below 76% of their maximum authorized strength.
Q2. How does the Critical Occupation Recruitment Allowance differ from the existing Recruitment Allowance?
The CAF will continue to offer a recruitment allowance of $10,000 and $20,000 to semi-skilled and skilled applicants as an incentive for enrolment into certain understrength NCM occupations. Certain officer occupations will continue to be considered for a recruitment allowance of various values. This allowance is dependent on entry plans and the skills an applicant brings to the CAF.
This new measure is different from the existing Recruitment Allowance, where the occupation must only fall to 95% or lower of the maximum authorized strength. Critical occupations will be evaluated annually with a different set of criteria.
Q3. Will members already serving in critical occupations receive additional incentives if they re-sign Terms of Service?
The Critical Occupation Recruitment Allowance is intended to support the attraction of new talent in critical occupations and came into effect as of November 1, 2025. Members who enrolled before November 1, 2025, will not be eligible for this allowance.
Q4. Is the Critical Occupation Recruitment Allowance retroactive to April 1, 2025?
No. The implementation for the Critical Occupation Recruitment Allowance is November 1, 2025, and it will not be applied before that date.
Q5. Will obligatory service and/or restricted release periods be applied to the Critical Occupation Recruitment Allowance for the 2nd and 3rd installments?
The 2nd installment is contingent upon reaching trained status. To receive the 3rd instalment, eligible members must agree to complete an additional 36 months of continuous service. Failing to complete the additional 36 months of continuous service will result in partial repayment of the 3rd installment.
Mobility Allowance
When a CAF Regular Force member is posted, or required to relocate, a range of benefits is available to support the member and their family throughout the experience. These benefits are designed to reduce the financial burden of frequently moving. As part of this announcement, the posting allowance will follow a more equitable scheme based on the number of moves, instead of a member’s rate of pay.
The current allowance of a month’s pay, or a half-month’s pay for a single member or Imposed Restriction (IR) move, will be replaced with $13,500 for each of the first three moves, $20,250 for moves 4-6, and $27,000 after that. This applies to single members as well as those with families, although those on IR will receive half of the new allowance, given the other IR benefits being provided (Separation Expense and food, transportation and miscellaneous allowances).
Questions and answers
Q1. When is the new Mobility Allowance applicable?
The new Mobility Allowance comes into effect on April 1, 2026, and replaces the Posting Allowance. Mobility Allowance will apply to members who are posted with a Change of Strength (COS) date of April 1, 2026, or later. The legacy Posting Allowance policy will remain active for the immediate future and will continue to apply to members who were posted with a COS date prior to April 1, 2026, but who have not completed their move of dependents.
Q2. Who is eligible for the Mobility Allowance?
Regular Force members who are posted with a COS date of April 1, 2026, or later are eligible to receive the Mobility Allowance when they complete a posting relocation that does not prohibit the move of their household goods and effects (HG&E). Unlike the Posting Allowance, the Mobility Allowance does not require a member to have achieved “trained status” and therefore recently enrolled CAF members who are posted and authorized to move their HG&E before completing their initial occupational training (e.g. members on extended training or being “pre-positioned”) will be eligible to receive the allowance.
Q3. The Mobility Allowance starts on April 1, 2026, and its amount depends on how many moves a member has had. Will moves before April 1, 2026, count, or only moves after that date?
All qualifying moves made before April 1, 2026, will be counted toward the total number of moves, as long as they meet the eligibility criteria outlined in the policy. Members will be required to attest to the number of qualifying moves they have had prior to April 1, 2026. A new form (DND 6129) is being created for the purposes of making that attestation and should be available through the Defence Forms Catalogue in early 2026.
Q4. How will the new Mobility Allowance work for service couples?
The amount of Mobility Allowance each member of a service couple will receive depends on the unique and specific conditions involving each member’s posting.
When a service couple moves together from one location to another, each member will receive 50% of the allowance they would receive if they were posted alone. There is a special provision added to the policy that addresses cases where one member is entitled to a higher tier level than the other.
Other service couple scenarios are addressed in the policy, such as being posted apart or being reunited by posting.
Q5. Are Reserve postings counted towards eligibility for Mobility Allowance?
No. Like the Posting Allowance, the new Mobility Allowance is for Regular Force members only. Reservists will continue to receive a $2,000 Reserve Relocation Allowance when they are authorized to relocate at public expense after they have applied for and accepted a period of full-time Reserve Force service at a different place of duty. A Reserve Force member who transfers to the Regular Force may not count any Reserve Force moves toward their total number of qualifying moves.
Environmental Allowances
Given the increased need to maintain a ready force for both domestic and international deployments, the CAF will be making changes to environmental allowances, such as Land Duty Allowance (LDA), for field operations; and Sea Duty and Submarine Duty Allowance, for operations aboard ships and submarines. The current monthly allowance, prorated for the number of years in the environment, will transition to a daily flat rate of $100/day, and will be received when the member is actually at sea or in the field. These benefits exist to compensate CAF members whose duties expose them to adverse conditions not always experienced by others, even in the military. The Paratroop and Dive Allowances will also be changed and paid per jump or dive, respectively.
Click here to access CBI 205 effective April 1, 2026.
Questions and answers
Q1. Why are the environmental allowances being changed?
The changes to the environmental allowance policy are driven by the need to ensure that CAF members who are exposed to harsh environmental conditions are appropriately compensated. It is important to remember that allowances are not considered pay; rather, they are specifically intended to compensate members whose duties require them to operate in challenging environmental conditions. The following monthly allowances will cease on March 31, 2026:
- Paratroop Allowance
- Dive Allowance
- Land Duty Allowance (LDA)
- Sea Duty Allowance (SDA)
- Submarine Allowance
Effective April 1, 2026 these allowances will be paid per day (24 continuous hours), per jump or per dive, as applicable.
The Submarine Allowance will be merged with SDA.
Q2. How will the transition work?
The listed monthly allowances must cease on March 31, 2026. Work is underway to program the pay system to allow for the processing of the new daily allowances. Members will be notified by CANFORGEN once this work is complete.
During the interim period, units will be required to track members’ entitlement to these allowances for entry in the pay system once it is ready.
Members are reminded that, unlike monthly allowances that are paid automatically, a daily allowance is paid after the fact. Members should expect a payment lag of one to two months following the event for which the allowances are payable, depending on their pay office’s workload.
Q3. What about Aircrew Allowance?
Entitlement to Aircrew Allowance remains unchanged.
Q4. Can Royal Canadian Air Force (RCAF) personnel benefit from an environmental allowance, when working with another element?
Any CAF member performing duties that meet the criteria for an Environmental Allowance is eligible to receive it, regardless of their element.
Q5. What else has changed?
In addition to the introduction of the new daily allowances for LDA and SDA (ship and submarine), there have been many other updates to CBI 205, including the following:
- There are more stringent rules around the ceasing of monthly allowances. The “180-day rule” has been amended to 60 days to ensure that these benefits are only being paid to those exposed to the specific environment associated with the duties for which the allowance is intended;
- Monthly maximums have been adjusted to take into account the new allowance rates;
- Rescue Specialist Allowance has been updated to consider the new monthly maximums of the Paratroop and Diving Allowance rates;
- A new definition of “in the field” has been added to guide Commanding Officers and their staff on the application of the LDA;
- The monthly amount for Submarine Crewing Allowance has been increased to $600; and
- There have also been formatting changes; reorganized layout such as Special Forces Allowances being moved to Section 3 – Special Allowances; and the introduction of Domestic Operations and Arctic Allowances.
Domestic Operations and Arctic Allowances
Defending Canada is the CAF's top priority, with two main lines of effort. The first is to defend Canada's sovereignty. The second is to assist civilian authorities in natural disaster response, pandemic response, and other domestic emergencies. The CAF is introducing allowances for domestic operations and the Arctic, where members directly aid Canadians by providing disaster relief or in defending Canada’s sovereignty in the North. In addition to any environmental allowances being received, members will receive $45/day when deployed on a named domestic operation (e.g. Op LENTUS), and an additional percentage of their land duty (LDA) (50%) or sea duty (SDA) (25%) allowance when deployed in the Arctic.
Questions and answers
Q1. What are domestic operations for the purpose of this allowance?
Domestic operations, for the purpose of this allowance, are those authorized under subsection 273.6(1) of the National Defence Act. This provision authorizes the Government of Canada to direct the CAF to perform duties in support of public service.
Q2. What types of public service duties may be authorized?
Authorized duties may cover a broad range of activities, most commonly including responses to natural disasters—such as wildfires, floods, or pandemics—and the provision of humanitarian assistance, including supporting provincial authorities in evacuating populations at risk due to a natural disaster, or assisting local authorities in establishing temporary accommodations for displaced persons.
Q3. When does the Domestic Operations Allowance apply?
The Domestic Operations Allowance applies when such duties are performed in Canada, conducted under the Chief of the Defence Staff, on named domestic operations, and in situations requiring a rapid response from the CAF.
Q4. Does the Domestic Operations Allowance apply to aircrew supporting the operation?
The allowance applies in this situation only if the aircrew member remains at the designated post and meets the 24-hour continuous presence requirement.
Q5. Can members receive LDA or SDA at the same time as the Domestic Operations Allowance?
Yes. Members may be eligible to receive LDA or SDA concurrently with the Domestic Operations Allowance, provided they meet the criteria for both.
Q6. What is the purpose of the Arctic Allowance?
The purpose of the allowance is to provide incremental financial compensation to members in receipt of LDA or SDA for performing duties involving exposure to austere Arctic conditions.
Q7. Who is eligible for the Arctic Allowance?
Members who are in receipt of LDA or SDA and are physically present in the Arctic for at least 24 continuous hours are eligible for the Arctic Allowance.
Q8. Does the Arctic Allowance apply to aircrew flying into the Arctic?
The allowance applies in this situation only if the aircrew member is also in receipt of LDA or SDA and meets the 24-hour continuous presence requirement. Receipt of Aircrew Allowance alone does not make one qualify.