As a servicemember, you can expect to be stationed virtually anywhere in the country. During your career, you are likely to be assigned to a variety of low-, moderate- and high-cost locations. Although private sector pay often reflects the local cost-of-living, military basic pay tables do not vary based on location. To help offset the effects of higher cost areas, military servicemembers may be eligible for a Cost-of-Living Allowance (COLA). COLA is designed to compensate for being stationed in certain “high-cost” locations in the continental United States (CONUS).
2011 COLA Update: Due to the continuing recession and subsequent reduction in the cost-of-living for many areas, the 2011 CONUS COLA rates have dropped for most Military Housing Areas, with the exception of New York, Staten Island, and locations in Illinois and Massachusetts.
In addition, Great Lakes NAVTRACEN and Worcester, MA have been added back to the list of COLA eligible MHAs, while Madera, CA, Miami/Fort Lauderdale, Seattle, and both Perth and Ft. Monmouth, NJ have been taken off the COLA list for 2011.
COLA Eligibility
You qualify for COLA under any of these conditions:
- You are assigned to a high-cost area in the Continental United States (CONUS). As of this writing, there are less than 30 such locations (military housing areas, or MHAs) in the U.S.
- You are assigned to an unaccompanied tour of duty outside the continental United States if the primary dependent of the member resides in a high cost area in the continental United States.
- It is determined that your primary dependent must reside in a high cost area in the continental United States due to your duty location or other circumstances.
Important COLA Details
- CONUS COLA is based on the zip code of your duty station, not your home address.
- CONUS COLA is a taxable allowance; an amount is added to cover an average income tax rate
- COLA is computed separately for members with and without dependents.
COLA is designed to Compensate for a portion of excess costs for non-housing expenses incurred in areas that exceed the average cost of living by more than 8percent. Qualification for CONUS COLA is based on geographic duty location, i.e., the zip code of duty station not the member’s zip code.
The amount of COLA each servicemember receives is based on three main factors.
- Servicemember family status. Servicemembers with dependents are paid a different rate than those without dependents.
- Location based COLA indexes. Indexes are computed for all military housing areas (MHAs), which represent major metropolitan areas and installations throughout CONUS. Non-MHA areas are also considered as eligible for the program based on costs for cities, townships or urban areas in the vicinity.COLA indexes are adjusted annually based on new cost data as determined by the local market prices, access to and utilization of military commissaries and exchange services.
Note: The utilization data for commissary and exchange facilities is obtained from surveys conducted approximately once every three years by the Per Diem, Travel and Transportation Allowance Committee through the Defense Manpower Data Center. This survey is mailed to over 9400 CONUS-based servicemembers randomly selected by pay grade, Service and geographic region.
- Pay Grade and Compensation. COLA payment rates are based on regular military compensation (RMC) and spendable income. RMC includes basic pay, basic allowance for subsistence, an average basic allowance for housing (BAH) and the tax advantage. Spendable income is total income, less Federal income taxes, housing and housing-related expenses, gifts and contributions, life insurance and savings.