The 2016 military pay increase has been announced and is 1.3%, effective Jan. 1st, 2016. However, General and Flag Officers above pay grade O-7, will not see an increase due to a pay freeze at those higher levels. The military pay increase has been 1% or .8% for the past two years, which is less than the private-sector wage growth.
See 2016 military pay charts here.
The military pay increase is based on the defense budget President Barack Obama delivered to Congress. The National Defense Authorization Act (NDAA) typically is not signed into effect until late December. During this this time Congress and the President negotiate final terms of the bill prior to passing. The actual military pay increase may be different than what is currently proposed. 
Current 2016 Defense Budget Status: Signed into law.
Service members’ annual pay increase is determined by the Bureau of Labor Statistics’ Employment Cost Index and growth in private-sector wages. However, by law, Title 37, Chapter 19, Section 1009, the President can set an alternate pay raise which is what is being proposed this year.
The first paycheck reflecting the military pay increase will be received on Friday, Jan. 15th, 2016 for the pay period Jan. 1st, 2016 through Jan. 15th, 2016.
Historical Military Pay Raises by Year
Year Military Pay Raise Year Military Pay Raise
2023 4.6% (projected) 1992 4.2%
2022 2.7% (projected) 1991 4.1%
2021 3% 1990 3.6%
2020 3.1% 1989 4.1%
2019 2.6% 1988 2%
2018 2.4% 1987 3%
2017 2.1% 1986 3%
2016 1.3% 1985 4%
2015 1% 1984 4%
2014 1% 1983 4%
2013 1.7% 1982 14.3%
2012 1.6% 1981 11.7%
2011 1.4% 1980 7%
2010 3.4% 1979 5.5%
2009 3.9% 1978 7.1%
2008 3.5% 1977 4.8%
2007 * 2.7% 1976 5.%
2006 3.1% 1975 5.52%
2005 3.5% 1974 6.2%
2004 * 4.2% 1973 6.7%
2003 * 4.7% 1972 7.2%
2002 * 6.9% 1971 7.9%
2001 4.1% 1970 8.1%
2000 6.2% 1969 12.6%
1999 3.6% 1968 6.8%
1998 2.8% 1967 5.6%
1997 3% 1966 3.2%
1996 2.4% 1965 E: 11% O: 6%
1995 2.6% 1964 2.5% - 8.5%
1994 2.2% 1963 12.6%
1993 3.7% 1962 None
* 2002, 2003, 2004, and 2007 are the average percentage raise as military pay raises differed for various military pay grades.
Military pay increases are for all branches of the U.S. Armed Forces; Air Force, Army, Coast Guard, Marines, Navy, and Reserve forces where applicable.
