Military Leave Differential Pay Calculations

An employee on active military duty whose gross military pay is less than his/her gross state pay is entitled to differential pay. Differential pay will be granted through emergency leave in the percentage of time necessary to make up the difference between military pay and state pay. Departments should compute the number of emergency leave hours to be granted by:

  1. Determining the rate of both military pay and state pay.

    Example: Employee earns $2,000 per month on active duty (excluding pay provided while serving in a combat zone, hardship duty pay, and family separation pay). Employee state pay is $2,723 per month.

  2. Determining the number of standard work hours in each month.

    Example: In the month of September 2005, there are 176 work hours (22 workdays multiplied by 8 work hours).

  3. Determining the hourly rate of pay each month for state pay.

    Example: The average hourly rate for state pay is $15.47 ($2,723 divided by 176 hours for the month of September).

  4. Subtracting the difference in military pay (excluding pay received while assigned to a combat zone, hardship duty pay, and family separation pay) from state pay for each month.

    Example: State pay is $2,723. Military pay is $2,000. The difference is $723.

  5. Taking the difference in monthly pay and dividing that number by the hourly rate of the state pay for that particular month to obtain the number of emergency leave hours to provide the employee.

    Example: Take the $723 calculated above and divide that by the state hourly pay of $15.47 for the month of September, which equals 46.74. The 46.74 equates to hours that should be converted to days, rounded up to the nearest whole number. In this example, you would take 46.74 divided by 8, which is the number of hours in the workday, to get 5.84 days. This should be rounded to the nearest whole number, which would be 6 days.* Next, the number of days should be converted back to hours, which in this case would be 48 hours of paid emergency leave (6 days x 8 hours = 48 hours of emergency leave).

    * As per Government Code, the combination of emergency leave and military pay may not exceed the employee's actual state gross pay. Departments must make necessary and proper adjustments within this example to ensure the emergency leave matches (but does not exceed) the employee's gross pay as close as is possible.

The military leave and earnings statement contains information on total paid benefits received by the service member. The department should include all state-paid benefits (benefit replacement pay, longevity pay, etc.) when calculating the differential amount.

Resource used to develop this document

Texas State Auditor's Office Military Pay Differential Guidelines