Generals are the highest ranking -- and highest paid -- officers in the U.S. Army, Air Force and Marines. The officers' ranking systems in these three are identical, including their rank insignia and their pay and retirement benefits.
There are four pay grades of general -- O-7, brigadier general; O-8, major general; O-9 lieutenant general; and O-10, general. The equivalent of generals in the U.S. Navy are called admirals; their salary and retirement benefits are the same as generals in the other branches of armed service.
The two basic methods to determine a military member's retirement pay are the final pay method and the high-36 method. Those who entered military service or who reported to a U.S. military academy or R.O.T.C. program before Sept. 8, 1980 use the final pay method. All others use the high-36 method.
Final Pay Method
The pay for this method is based on years of service and the general's salary during their last pay period. For most generals -- as for lower ranking military members -- the pay will be highest at the end of their time of service. One possible exception is a general who loses rank due to a court martial.
This method is based on the average base pay of the general's highest 36 months of service. This will usually be their last three years of service.
Generals' Base Pay
As of the 2015 pay scale, the lowest possible base pay for a brigadier general is $8,264.40 per month, assuming he has two years of service or less (a highly unlikely scenario). The highest possible base pay for a general is $19,762.50 per month with over 40 years of service and the O-10 pay grade. A more average major general with between 26 and 28 years of service has a base pay of $13,647.30.
The Effect of Years of Service
Any military member's retirement pay is a percentage of the high-36 or final pay based on years of service. The percentages are based on 2.5 percent per year of service. For example, a general who has served 20 years is eligible for 50 percent of his high-36 (or final pay), while a 40-year veteran is eligible for 100 percent of his high-36 (or final pay).
A general who serves more than 40 years can actually receive a higher salary after he retires than he had while he was on active duty.