Allowances: Cost-of-Living Allowance - Military Pay & Allowances - Military Times

Allowances: Cost-of-Living Allowance

ConUS COLA

A cost-of-living allowance is paid to military personnel assigned to high-cost locations in the continental U.S.

Payments are based on rank, years of service, location and whether the service member has dependents. Monthly rates run from as little as $18 up to $715 in the costliest locations. The money is intended to cover higher transportation, food, clothing and other nonhousing costs in areas where those costs exceed the national average by more than 8 percent.

For 2010, the taxable allowance is paid in 29 high-cost locations. It is paid automatically based on the member’s military duty ZIP code.

Overseas COLA

The overseas cost-of-living allowance is a supplement to regular pay that reflects higher prices overseas for goods and services. The nontaxable allowance varies with location, rank and number of family members. Rates are reviewed periodically and adjusted to reflect fluctuations in costs as well as foreign currency exchange rates.

About 250,000 service members in more than 600 locations receive overseas COLA.