Frequently Asked Questions

Guidelines for Citing BEA Information | ID: 553 | Created: Nov-03-2010

What is included in federal government employee compensation?

Compensation of civilian employees of the federal government consists of wages and salaries and supplements to wages and salaries. Supplements includes employer contributions for employee pension plans, health insurance, life insurance, and government social insurance.

  • Wages and salaries consist of the monetary remuneration of civilian employees. Beginning with 1998, they also include payments to subsidize the transportation costs of federal employees who use mass transit to commute to and from work.
  • Employer contributions for employee pension and insurance funds consist of payments by the federal government for pension plans, health insurance, and life insurance for its civilian employees.
  • The contributions for pension plans include employer contributions to defined-benefit civilian retirement plans (CSRS and FERS) and to the defined-contribution plan known as the Thrift Savings Plan (TSP). Contributions by the federal government to the defined- benefit civilian retirement plans are recorded on an accrual basis.
  • The contributions for employee health insurance consist of the federal share of premium payments to private health insurance plans for current employees and retirees.1   Similarly, the contributions for employee life insurance consist of the federal share of premium payments to privately administered life insurance plans.
  • Employer contributions for government social insurance include payments by the federal government for social insurance programs such as old-age, survivors and disability insurance (social security) and hospital insurance (Medicare Part A). The federal government also pays for unemployment insurance and publicly administered workers' compensation.

Similar to its civilian counterpart, compensation of the military (active duty and reserve) consists of wages and salaries and supplements to wages and salaries.

  • Wages and salaries include monetary remuneration of the military and in-kind compensation such as housing allowances, uniform allowances, and rations.
  • Employer contributions for employee pension and insurance funds include federal contributions to the defined-benefit pension plan for the military recorded on an accrual basis.2   Payments for government social insurance for old-age, survivors, disability insurance (social security) and hospital insurance (Medicare Part A), unemployment insurance, and veterans life insurance.
  • Employer contributions to the privately administered Service Group Life Insurance.
  • Payments for health care benefits received by active duty personnel and their dependents at nonmilitary facilities through the program known as TRICARE.3

Beginning with 2002, military compensation also includes payments by the Department of Defense for accrual funding of health care benefits for retirees. Please see, "Defined Benefit Pensions and Household Income and Wealth," and the FAQ “What changes were made to pensions during the 2013 comprehensive revision, and how have the changes affected private, federal, and state and local compensation?” for information on the accrual approach to measuring defined-benefit pension plans.


1 The payments to amortize the unfunded health care liabilities of the Postal Service Retiree Health Benefits Fund are treated as capital transfers to persons and are therefore not included in compensation.

2Although U.S. military service members have been participating in the defined-contribution plan (TSP) beginning in 2001, the matching contributions by the Department of Defense are limited to new recruits in certain specialties. Therefore, the employer contributions to the defined-contribution plan are very small at present

3The payment to cover the unfunded liabilities of the health care fund for military retirees (Medicare-Eligible Retiree Health Care Fund) is excluded from compensation and recorded as a capital transfer to persons

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