Military COLA Explained: CONUS vs Overseas (and the Tax Catch)
Cost-of-Living Allowance (COLA) offsets high day-to-day prices — groceries, gas, services — in expensive duty locations. It's separate from BAH (which only covers housing), and there are two very different flavors.
OCONUS COLA (overseas)
- Paid in high-cost overseas locations (Japan, Germany, and similar; Hawaii and Alaska have their own version).
- Amount depends on location, grade, years of service, and dependents, and adjusts with exchange rates — it can change several times a year.
- Tax-free.
CONUS COLA (stateside)
- Paid only in a small list of high-cost U.S. areas where local prices far exceed the national average.
- Typically much smaller than overseas COLA.
- Taxable — the rare allowance that is, set by statute (unlike BAH/BAS).
Quick rule: overseas COLA is tax-free; stateside (CONUS) COLA is taxable. If you're entering a COLA amount into a pay calculator, know which one you're getting.
How to find your rate
Rates are published by the Defense Travel Management Office (travel.dod.mil) with lookup tools for both programs. Enter the monthly amount into the calculator's COLA field to see the paycheck impact alongside your BAH and BAS.
Add your COLA and see your true monthly take-home.
Calculate my pay →Frequently asked questions
Is military COLA taxable?
Overseas (OCONUS) COLA is tax-free. Stateside (CONUS) COLA is taxable — it's the rare military allowance that is.
What determines my COLA amount?
Location, pay grade, years of service, and number of dependents; overseas rates also adjust with currency exchange rates.
Is COLA the same as BAH?
No. BAH covers housing; COLA offsets non-housing living costs like groceries and services in expensive areas.