Aerial view of the Pentagon in Arlington, Va., as seen on Oct. 21, 2021. (Robert H. Reid/Stars and Stripes)
WASHINGTON — Service members assigned to about three dozen urban areas of the U.S. will see a bump in cost-of-living allowance rates at the start of 2025, while more than 50 other locations will lose the extra money, the Pentagon announced Friday.
For troops living in more expensive duty locations, cost-of-living allowance rates will range from $35 to $60 per month for service members with dependents, and from $27 to $46 per month for those without dependents.
The cost-of-living allowance is a taxable supplemental allowance designed to help offset the higher costs of non-housing goods and services for troops living in the most expensive areas of the U.S. Impacted areas include counties in states such as New York and California.
This year, 10 military housing areas will begin receiving a cost-of-living allowance, and another six military housing areas will receive an increase in rates.
Military housing areas are the groups of ZIP codes surrounding military installations for which the Defense Department sets a basic housing allowance rate.
In non-military housing areas, troops in 25 select counties will gain a cost-of-living allowance. Non-military housing areas area locations where housing options are not provided by the military.
The military housing area of Humboldt County, Calif., will see the largest increase — going from no cost-of-living allowance to a 5% cost-of-living rate. The exact amount each member receives will vary by pay grade and family size.
There will be three military housing areas that see a decrease in cost-of-living rates, and another four that will lose the rates all together. In non-military housing areas, there are 51 counties that will have cost-of -living allowances halted entirely. One county will see a decrease.
The military housing area that will see the largest decrease is New York City going from a 13% rate to 8%.
To establish the cost-of-living allowance, a contractor provides the Defense Department with cost data from each military housing area and non-MHA for the following categories: transportation, goods and services, federal income taxes, sales taxes and miscellaneous expenses. The data is adjusted to account for basic allowance for subsistence, which is meant to offset the costs for service members’ meals, day care subsidies and for cost savings gained from shopping at commissaries and exchanges. This information is compared to the average cost data for the continental U.S., which serves as a benchmark.
By law, a cost-of-living allowance rate for the continental U.S. is only prescribed when the index meets a certain threshold above the U.S. average. For 2025, the costs for non-housing types of goods and services in a particular location must be at least 7% more expensive than average U.S. costs to qualify for a cost-of-living payment.
Military housing areas with the highest cost-of-living rates include New York City at 8%, Humboldt County at 5% and San Francisco at 5%.
Service members can calculate their CONUS COLA rate at https://www.travel.dod.mil/Allowances/CONUS-Cost-of-Living-Allowance/CONUS-COLA-Rate-Lookup/.
