Pay & Entitlements
Three different allowances, three different jobs. Here's how CONUS COLA, OCONUS COLA, and OHA work, and which one applies to you.
Renovated overseas military family housing at Kadena Air Base, Okinawa. Photo by Patrick Ciccarone, USACE, DVIDS (public domain).
Three allowances share a job, but they are not the same thing. COLA is a cost-of-living allowance that helps offset higher prices in certain locations. CONUS COLA applies at some high-cost stations inside the continental United States, which means the lower 48 states. Overseas COLA applies when you are stationed overseas. OHA, the Overseas Housing Allowance, is your housing money overseas.
The most common mistake is mixing up CONUS COLA and Overseas COLA. Get the names straight first, and the rest is easy.
CONUS COLA, Overseas COLA, and OHA each do one job. Learn which is taxable, which is tax-free, and which one reimburses your rent instead of paying you a flat amount.
OCONUS means overseas. Specific dollar rates depend on your location and exchange rates, so use the DTMO lookups for your numbers.
OHA is not the same as BAH
How OHA works: OHA is the overseas BAH, but it reimburses your actual rent up to a ceiling (no extra to pocket), plus a utility amount. BAH is a flat amount you keep regardless of rent.
Mixing up CONUS and Overseas COLA is the most common COLA mistake.
Source: DTMO · IRS Pub 3
CONUS COLA is paid at a number of high-cost duty stations inside the continental United States. It is set by your location, grade, years of service, and dependency status, which is whether you have dependents. It is taxable, and it changes about once a year. It covers non-housing costs, so it is separate from BAH.
Overseas COLA, also called OCONUS COLA, is paid at overseas duty stations where everyday goods and services cost more than the average inside the continental United States. It is tax-free, and it can change often, sometimes each pay period, as exchange rates and local prices move. It is meant to equalize your purchasing power, not to reimburse specific expenses.
Not everyone overseas draws it. If the local cost of living is the same as or lower than the US average, you do not draw Overseas COLA. Single members in government quarters with a meal card draw a reduced amount.
OHA is your housing money when you are stationed overseas and lease private housing instead of living in government quarters. It is the overseas equivalent of BAH. The big difference from BAH is how it pays out. OHA reimburses your actual rent up to a ceiling, plus a separate utility and recurring-maintenance amount. If your rent is under the ceiling, you draw less than the maximum. If it is over the ceiling, you cover the difference yourself. OHA is tax-free and shifts with exchange rates.
If you live in government quarters overseas, OHA does not apply.
Here is why these allowances need extra attention in uniform.
Overseas COLA and OHA change with exchange rates. Plan for that before you sign a lease, and price your housing against the OHA ceiling.
Not a fixed number: DTMO updates Overseas COLA and OHA on the 1st and the 16th of each month, so your rate can move mid-month with exchange rates. Do not build a steady number into your household budget.
When you PCS
Government quarters overseas? OHA does not apply.
Source: DTMO
Your COLA and OHA reset to your new station every time you move. Moving stateside to stateside, your CONUS COLA depends on whether the new station is a designated high-cost area. Moving overseas, you switch from BAH to OHA and may pick up Overseas COLA. You can draw both at once, since OHA covers housing and Overseas COLA covers goods and services. Price out housing and daily costs before you commit to a lease.
For anything specific to your pay account, start with your servicing finance or disbursing office, which may be called S-1, admin, or the base finance office. DFAS, the Defense Finance and Accounting Service, runs customer service at 1-888-332-7411 and the askDFAS tool for pay-record questions. You can view your LES, tax withholding, allotments, and TSP in MyPay. For free financial counseling, available 24/7, reach out to Military OneSource. Your installation's Personal Financial Management program offers free in-person counseling too. All of the links are in Sources below.
Is Overseas COLA taxable?
No. Overseas COLA is tax-free. The contrast is stateside CONUS COLA, which is taxable.
Do I get both OHA and Overseas COLA?
You can. They cover different things and are calculated independently. OHA is for housing, and Overseas COLA is for non-housing goods and services.
Why does my Overseas COLA or OHA change so often?
Exchange rates. DTMO updates station allowances on the 1st and the 16th of each month, so your rate can move mid-month with currency swings and local prices.
