Military Pay Breakdown: US and Overseas Allowances

Military pay and benefits vary significantly depending on the duty location. There’s a big difference between serving in the continental U.S. (CONUS) and being stationed overseas (OCONUS) in terms of allowances and financial support.

If your family considering an overseas assignment or just wondering how it compares to staying stateside, here’s a breakdown of the key differences in pay and benefits between CONUS and OCONUS duty stations. I’ll also add some real-life insights from my own experience as a military family!

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CONUS (Continental United States) Assignment

📍 Base Pay

• Base pay is fixed based on rank and years of service. It remains the same whether you’re stationed in the U.S. or overseas.

📍 Housing Allowance (BAH: Basic Allowance for Housing)

• The amount you receive depends on the cost of living in your duty station.
• If you live in government-provided housing, you won’t receive BAH.
• High-cost areas like Hawaii or California typically have higher BAH rates.

📍 Subsistence Allowance (BAS: Basic Allowance for Subsistence)

• A fixed amount provided to cover food expenses.
• The rate is the same regardless of rank.
• As of 2025, it’s around $300–400 per month.

📍 Cost of Living Adjustment (COLA)

• Only available in select high-cost areas like Hawaii, Alaska, and Washington D.C.

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OCONUS (Outside Continental United States) Assignment

When stationed overseas, service members receive additional allowances to offset the higher cost of living and unique challenges of being away from the U.S.

📍 Overseas COLA (Cost of Living Adjustment)

• A supplement to cover the increased cost of living in foreign countries.
• The amount varies depending on local prices and exchange rates.
• If your family accompanies you, the COLA rate increases.

📍 Family Separation Allowance (FSA)

• If you’re assigned overseas without your family, you receive an additional $250 per month.

📍 Imminent Danger Pay / Hostile Fire Pay

• If stationed in a designated combat zone or hazardous area, you get an extra $225 per month.

📍 Language Proficiency Pay

• If you pass the DLPT (Defense Language Proficiency Test) and use a critical language for your job, you can qualify for extra pay.

📍 Per Diem Allowance

• Covers daily expenses for temporary duty (TDY) or PCS travel.

📍 Housing Allowance (OHA: Overseas Housing Allowance)

• Instead of BAH, service members overseas receive OHA to cover rent.
• The allowance is based on actual rental costs, with a set limit per location.
• For example, in Germany, OHA can range from $1,500 to $3,000 per month.

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📍 Relocation Support (PCS Allowance)

• The military covers the cost of moving household goods and vehicles for an OCONUS PCS.

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📍 Tax-Free Shopping Benefits

• Overseas bases have PX/BX (Post/Base Exchange) and Commissary stores, where service members and families can shop tax-free.
• This is a huge financial benefit, especially in countries with high sales taxes.

📍 Additional Benefits

✅ Healthcare & Medical Services

• Both service members and their families have access to TRICARE, providing free or low-cost medical care.
• While stationed overseas, TRICARE often covers treatment at local hospitals, making it easier to receive medical care abroad.

✅ Travel & Airfare Benefits

• Space-A Travel: While serving overseas, you can take advantage of Space-Available (Space-A) flights, allowing you to travel for free on military aircraft if seats are available.
• Military Flight Discounts: Many airlines, including United and Delta, offer military discounts on airfare.

✅ Education Support

• Military children stationed overseas have access to DODEA (Department of Defense Education Activity) schools or tuition assistance for private education.

Looking at it this way, military pay isn’t just about the base salary—it’s a combination of various allowances and benefits that can significantly impact your overall income. Housing Allowance (BAH/OHA), Cost of Living Allowance (COLA), Hazard Pay, and Language Pay all vary depending on duty location, family status, and job role. This means you can’t just calculate your salary based on Base Pay alone.

At first, I didn’t realize how detailed these benefits were. I simply thought of it as receiving a paycheck, but after experiencing it firsthand, I saw how duty location, whether you have dependents, and your job role can make a big difference in actual earnings—much more than I had expected.

Now, I want to share what I’ve personally experienced and found valuable about military pay in more detail. Instead of just focusing on the numbers, I’ll talk about which benefits have been the most helful in real life and how my family has taken advantage of them.

COLA (Cost of Living Allowance) Explained

COLA is an additional allowance provided to service members stationed overseas or in high-cost areas within the U.S. It helps offset the higher cost of living in certain regions and varies significantly based on location, family status, rank, years of service, local living expenses, and exchange rates.

Here’s an overview of COLA payments by region and the factors that determine the amount:

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✅ COLA for Overseas Assignments

📍 Europe (Germany, Italy, UK, etc.)

• $300–$1,200 per month
• The cost of living in Europe is generally high, and service members with dependents receive higher COLA.

📍 Asia (South Korea, Japan, etc.)

• $200–$800 per month
• South Korea: COLA varies by region, with Seoul receiving higher rates due to higher living costs.
• Japan: Locations like Tokyo and Okinawa receive higher COLA due to elevated expenses.

📍 Other Locations

• Hawaii & Alaska (though part of the U.S.) also qualify for COLA due to high living costs.
• Hawaii: Typically $200–$600 per month.

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✅ How COLA is Calculated

💡 Dependents

• Having family members accompany you increases COLA.
• Example: If a single service member receives $300, it could increase to $700 with dependents.

💡 Exchange Rates

• If the U.S. dollar weakens, COLA payments increase to compensate.
• Example: If the Euro strengthens, service members in Europe receive more COLA.

💡 Local Living Costs

• Higher-cost cities receive higher COLA.
• Example: Munich (Germany) has higher COLA than smaller towns due to increased expenses.

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✅ COLA Example for U.S. Forces in South Korea

• Seoul (Yongsan/Gangnam): $400–$800 per month
• Gyeonggi Province (Pyeongtaek/Camp Humphreys): $300–$600 per month
• Other Regions: Generally lower, around $200–$500 per month

Our experience : Our family has consistently received COLA benefits while living in Hawaii and overseas. Since the cost of living in Hawaii is quite high, COLA was a huge help—especially because we had to pay around $500 per month in HOA fees, which we were able to cover with COLA, making things much less stressful.

Even during overseas assignments, we continued receiving COLA, and one of the biggest advantages was that we could still get it even in regions where the cost of living was relatively low, like in Asia. Thanks to that, we didn’t have to worry too much about daily expenses and were able to enjoy a more comfortable financial situation. Honestly, overseas assignments feel a little more financially generous because of COLA.

Let’s take a closer look at the Foreign Language Proficiency Bonus (FLPB), a benefit given to military service members with proficiency in certain foreign languages. This additional allowance can be a significant financial boost, and our family has certainly benefited from it. Now, let’s break down the eligibility and benefits of FLPB.

Eligibility for Language Pay

📍 Eligible Service Members
FLPB is given to service members who are proficient in a language designated as strategic or militarily important by the U.S. military. To qualify, service members must score above a certain level on the DLPT (Diagnostic Language Proficiency Test) or OPI (Oral Proficiency Interview). Some of the languages included are Korean, Arabic, Chinese, Russian, Spanish, and others.

📍 Proficiency Levels
The FLPB is based on proficiency in reading, listening, and speaking, with scores for each skill area being important. Scores range from 0 (no proficiency) to 3 (expert level).

📍 Language Importance
The importance of the language is categorized into 1-3 categories, with more critical languages offering higher allowances. For example, Korean is one of the Category A languages, which are considered militarily important.

📍 Language Pay Amounts

• Base Amount
  The amount awarded ranges from $100 to $500 per month, depending on the proficiency and importance of the language.
• Multiple Language Bonus
  If a service member is proficient in two or more languages, they can receive an additional allowance for up to two languages. The maximum payout is $1,000 per month, which is the combined maximum amount for two languages.
• Payment Based on Scores
  To qualify for payment, service members must score at least 2/2 in each area (reading, listening, speaking). Generally, a 2/2 score results in $200–$300 per month, while a 3/3 score earns a higher amount.

📍 Expanded Opportunities
Service members who are proficient in foreign languages play vital roles in overseas assignments, intelligence analysis, and translation duties, which can lead to more opportunities within the military.

Our family has greatly benefited from the language pay, as my husband receives this allowance for his proficiency in multiple languages. FLPB not only provides financial benefits but also offers military service members valuable opportunities to utilize their language skills.

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Let’s now discuss the Basic Allowance for Housing (BAH), which is provided in the U.S., and the Overseas Housing Allowance (OHA), which applies overseas. These two housing allowances are structured differently, and the way they are utilized can vary significantly. I’ll go into detail about how each allowance works and share our personal experiences with them.

1. Basic Allowance for Housing (BAH) – U.S. Domestic

📍 Payment Structure
The amount for BAH is based on the average housing costs for a particular area and is paid monthly.
This allowance is fixed and is provided regardless of the actual amount spent on housing.

📍 Key Features

• If you spend less on housing than the amount allotted, you can keep the difference.
  Example: If your BAH is $2,000 and you pay $1,500 in rent, you can keep the remaining $500.
• On the other hand, if you rent a more expensive property, you will be responsible for the difference.

📍Advantages

• Single soldiers or those without dependents have a greater opportunity to save money by choosing affordable housing options.

• You can strategically manage your housing costs to potentially save extra money.

2. Overseas Housing Allowance (OHA) – Overseas

📍 Payment Structure
OHA is based on actual rent and utilities expenses. The amount is determined by the rental agreement submitted by the service member, which includes the rent and utility costs. There is a limit on how much you can receive depending on the area.

Example: If the OHA cap in Germany is $2,500 and your rent is $2,000, you’ll receive $2,000.

📍 Key Features

• If the rent exceeds the allowance limit, the service member is responsible for the excess amount.
• If the rent is below the cap, the remaining money is not reimbursed.
• Example: If the cap is $2,500 and you rent a place for $2,000, the additional $500 is not paid out.

📍 Payment Structure

• Unlike BAH, if you choose a less expensive housing option, you cannot keep the difference. The payment is strictly tied to the actual rent and utility costs.

When we lived in Asia, we received the Overseas Housing Allowance (OHA), which was based on the actual rent stated in the lease agreement. This means that even if we spent less than the allocated amount for rent, we couldn’t save the remaining money.
On the other hand, in the U.S., we receive the Basic Allowance for Housing (BAH), which is a fixed amount paid each month. Since BAH is a set amount, we can adjust our housing costs and save any remaining funds. For example, in Washington D.C. or Hawaii, we were able to save or use the extra money for other expenses by managing our rent with the BAH. Currently, in Kentucky, the rent is higher than the BAH, so we cover the difference with our own money. Ultimately, we’ve learned that how housing allowances are paid can make a big difference in our lifestyle, even with the same salary.

When my husband was deployed to Kuwait, he received the Combat Zone Tax Exclusion (CZTE) benefit, which meant his federal income tax was exempt.

If a U.S. military service member is assigned to an officially designated Combat Zone, their base pay and certain special allowances are excluded from federal income tax.

Combat Zone Tax Exclusion (CZTE)

📍 What is Combat Zone Tax Exclusion (CZTE)?

• CZTE is a tax benefit that allows military personnel serving in designated combat zones to have their base pay and certain allowances exempt from federal income tax.
• Kuwait is one of the officially designated combat zones, so service members deployed there qualify for CZTE.

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📍 Key Benefits of CZTE

✅ Tax Exemption on Military Income

• Base pay, special pay, and certain bonuses are excluded from federal income tax.
• State income tax may still apply, but if the service member’s home of record is in a tax-free state (e.g., Florida or Texas), they could be exempt from state taxes as well.

✅ Types of Income That Are Exempt

✅ Monthly Tax Exemption Limits for Officers

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📍 Designated Combat Zones

• Iraq
• Afghanistan
• Syria
• Qatar
• Saudi Arabia

(The list may change depending on military operations.)

Our Personal Experience

Experiencing these financial benefits firsthand made a big difference for our family. With additional allowances like COLA (Cost of Living Allowance) and OHA (Overseas Housing Allowance), the cost of living felt much more manageable. The tax exemption was a huge help, allowing us to save and invest more effectively.

That said, every location has its pros and cons. But in the end, we’re grateful for the experiences we’ve gained from living in different places.

If you’re a military family, have you experienced any other financial benefits or tips you’d like to share? Also, what topics would you like to see in my next blog post? Drop a comment and let me know!

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