Augustus standardized the pay and allowances of the entire Army - at the same time fixing the period of service and the bounty due on its completion - according to military
Rank; this would discourage them from revolting, when back in civil life, on the excuse that they were either too old or had insufficient capital to earn an honest living. (Suet. Aug. 49, tr. M. Grant)
On gaining sole control of the Roman world in 31 bce, Octavian faced a number of problems. These included the need to demobilize the inflated armies of the civil wars without causing excessive unrest, the need to focus the loyalty of the remaining forces on the state (or rather, on himself, as the leader of the state), and to prevent other ambitious individuals from winning soldiers’ loyalties as he had done himself in his rise to power. Octavian came to power in the same way as the republican potentates (Marius, Sulla, Pompey, and Caesar) who preceded him - namely by securing the support of troops who were loyal to him rather than to the republic or any other general - and by success in battle, ultimately the naval defeat of Antony at Actium. Ancient and modern writers have expressed doubts about Octavian’s personal bravery and military ability (see Antony’s slander in Suet. Aug. 16), but his genius lay not in winning battles but in reforming the Roman army in a manner that ensured that he was not replaced in the same way he had come to power (for a useful general survey see Keppie 1984: 145-71).
Augustus reduced the size of the bloated civil war armies, professionalized the remaining force and focused its loyalty on the emperor. As republican Rome had conquered the Mediterranean basin, the military requirements of conquering and garrisoning an empire with what had originally been a local militia had caused enormous strains, social, political, and economic. Augustus’ reforms also provided the Roman Empire with an effective standing force to garrison a huge empire. The essence of these reforms endured to provide the structural framework of the army well into the third century ce. However, the Augustan reforms also sowed the seeds of future problems, notably political and economic.