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Overseas Cost of Living Allowance (COLA)

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Updated September 14, 2010

The Overseas Cost of Living Allowance (OCOLA) is a supplement designed to equalize purchasing power between members overseas and their CONUS-based counterparts. The average supplement is $300 per month. The basic measurement is a comparison of CONUS shopping behavior and the aggregate shopping behavior at each overseas location.

The Overseas Cost-of-Living Allowance, or COLA, is paid to Service Members to partially offset high costs when stationed overseas (including Alaska and Hawaii). COLA helps maintain purchasing power so military members can purchase about the same goods and services overseas as in the United States. It does not reimburse expenses, but is designed to offset higher overseas prices of goods and services. It does not compensate for remoteness, hardship, or non-availability of goods and services.

Two overseas surveys and four CONUS (Continental United States) surveys are used to set Overseas COLA rates. Several factors determine Overseas COLA rates, including location, rank, number of years of service, number of dependents who may be living with the member at the overseas location, and whether or not the member resides in the barracks. Local monetary exchange rate also affects COLA. Because monetary exchange rates are reviewed twice per month, COLA payments can change from one pay period to the next.

For current COLA rates at any given overseas location, see the Department of Defense's Overseas COLA Calculator.

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