Military COLA, Explained

Cost-of-Living Allowance offsets higher non-housing costs at expensive duty stations. Here's how CONUSand OCONUS COLA work, what drives the amount, and where to get your exact figure.

CONUS COLA (high-cost US locations)

Paid at duty stations where non-housing costs run at least 7% above the national average. The amount depends on your grade, years of service, and dependents (your “spendable income”) times the location's cost percentage. The list of qualifying locations is reset each January and shifts year to year, so a station that pays CONUS COLA one year may not the next. It is taxable.

OCONUS COLA (overseas)

Paid at overseas duty stations to keep your purchasing power on par with the U.S. average. It is not taxable. The DoD computes it in steps:

1. Find your annual compensation by grade and years of service.
2. Map that to your average annual spendable income by dependents.
3. Look up the COLA index for your location.
4. Multiplier = index − 100.
5. Spendable income × that percentage = your annual COLA.
6. Divide by 360 for the daily rate, then multiply by days payable.

Example: an E-8 with 22 years and 4 dependents at a location with a COLA index of 120 has about $42,700 in spendable income × 20% = $8,540/year, or roughly $23.72/day. Because the index updates as often as twice a month, always confirm with the DTMO calculator.

Related: your basic pay, BAH, and deployment special pays.