HOW TO USE THE OVERSEAS COLA CALCULATOR TO MAXIMIZE YOUR MILITARY PAY

You just got orders to Germany, Japan, or Italy.

Your first question: How much will my paycheck change?

The overseas cola calculator gives you the answer in seconds. You need to understand how this tool works before you make any financial decisions.

What is COLA and Why It Matters to You

COLA stands for Cost of Living Allowance. You receive this non-taxable supplemental pay when stationed outside the continental United States.

The Defense Department pays you this allowance because groceries, gas, and daily essentials cost more overseas than back home.

Your OCONUS COLA helps you buy the same amount of goods overseas as you could in average U.S. locations.

How Overseas COLA Differs from CONUS COLA

You might have heard about CONUS COLA for stateside high-cost areas.

These two programs work differently:

Your overseas allowance responds to exchange rates twice monthly. You'll see your OCONUS COLA go up or down as the dollar strengthens or weakens against local currency.

Who Receives Overseas COLA?

You qualify for this allowance when stationed at any location outside the 48 contiguous states.

Eligible locations include:

• Europe (i.e., Germany, Italy, UK, Spain)
• Asia (i.e., Japan, South Korea, Guam)
• Middle East (i.e., Bahrain, Qatar, Kuwait)
• Alaska and Hawaii
• U.S. territories and possessions

You receive OCONUS COLA only when overseas costs exceed average U.S. prices. Your payment amount varies based on where the military stations you.

How the Allowance Helps Your Budget

Your paycheck stays relatively stable even when foreign prices spike.

The COLA calculator accounts for local economic conditions you can't control. You maintain the same purchasing power whether stationed in high-cost Tokyo or lower-cost South Korea.

This allowance does NOT compensate you for:

• Housing expenses (that's OHA or overseas housing allowance)
• Hardship or remoteness
• Lost spousal income
• Limited product availability

Certain financial situations that are specific to overseas relocations (i.e., family separation) have different funding processes. Check with your local finance office for additional information.

How the Military Calculates Your COLA

The Defense Department compares overseas prices to average U.S. prices using specific surveys.

Two surveys determine your rate:

Living Pattern Survey (LPS) - You complete this every three years. You tell the military where you shop: local stores, commissary, exchange, or online retailers.

Retail Price Schedule (RPS) - Military contractors collect prices for approximately 120 goods and services annually at locations you identified in the LPS.

Your participation in the LPS directly impacts future COLA rates for everyone at your duty station.

Factors That Determine Your Payment

The overseas COLA calculator considers four variables when calculating your allowance.

1. Location - Your duty station's cost index compared to average U.S. prices

2. Pay Grade - Higher ranks receive different amounts

3. Years of Service - Your time in service affects your spendable income calculation

4. Dependents - You receive more with family members on your orders

Your spouse's income does not factor into the calculation.

The system uses your "spendable income" as the baseline. This is your base pay minus taxes, savings, and certain fixed expenses.

Necessities like car insurance, gasoline, and childcare receive stronger weight in calculations. Non-essentials carry less weight in the final determination.

Real-world example: An E-7 stationed at Aviano, Italy, with 14 years of service and two dependents, receives an estimated $805* for January 2026.

Where to Find Current COLA Rates

Your OCONUS COLA changes frequently.

You need to check rates regularly because currency fluctuations occur daily. The military reviews exchange rates twice monthly and adjusts the pay system accordingly.

Using the Overseas COLA Calculator

You can calculate your estimated payment using the Overseas COLA Calculator below.

Here's how to use the calculator:

1. Filter your location by country
2. Select your duty station from the dropdown menu
3. Enter your pay grade (E-1 through O-10)
4. Input your years of service
5. Indicate whether you have dependents

The calculator shows your estimated monthly payment. Your actual payment appears on your LES as "COLA."

Viewing Rates on the Defense Travel Management Office Website

You can also view current rates at the Defense Travel Management Office. The official rate tables are published here on the DTMO website.

The site shows the cost index for each overseas location. An index of 120 means that the location is 20% more expensive than average U.S. prices.

The overseas COLA calculator pulls from these same official rate tables. You get accurate, up-to-date information directly from the source.

How COLA Fluctuates Monthly

Your OCONUS COLA can increase, decrease, or stay the same each pay period.

Currency exchange drives most changes.

When the dollar weakens against local currency, your COLA increases. When the dollar strengthens, your COLA decreases.

Price comparisons also matter.

If U.S. prices rise faster than overseas prices, your COLA drops. If overseas prices spike while U.S. prices stay flat, your COLA increases.

You might see your allowance jump $50 one month and drop $30 the next. These fluctuations are normal and expected.

Smart Budgeting with COLA

Don't count on OCONUS COLA for fixed expenses.

You should cover car payments, student loans, and other fixed obligations with your base pay alone. Your allowance supplements your purchasing power but shouldn't anchor your budget.

Our military overseas COLA calculator helps you see potential payment ranges. Use the tool to understand your financial picture before committing to major purchases overseas.

Budget conservatively. Build your monthly spending plan around your base pay and BAH. Treat COLA as supplemental income for variable expenses like groceries and gas.

How You Impact Future Rates

You directly influence COLA calculations for your duty station. Complete the Living Pattern Survey every three years.

Your responses tell the military where service members actually shop. If you and your peers shop mainly at expensive local boutiques instead of the exchange, the data reflects that reality.

Your shopping patterns shape which stores get surveyed for prices. The RPS collects pricing data only from outlets you identify in the LPS.

Low LPS participation produces inaccurate data. You want COLA rates that reflect real spending patterns at your location.

Starting in August 2025, the military outsourced RPS data collection to private contractors. You no longer see volunteers with clipboards in stores. But your LPS participation remains essential for accurate allowance calculations.

Country Allowance Coordinators at your installation coordinate the survey. You'll receive notification through your command when the LPS opens at your location.

Final Thoughts on the Military Overseas COLA Calculator

You now understand how the overseas cola calculator works and why your payment fluctuates. Check your rate before PCSing overseas. Budget conservatively without relying on the full COLA amount. Complete the Living Pattern Survey when notified.

Your overseas assignment comes with financial adjustments. The overseas COLA calculator helps you plan for them with accurate, up-to-date information.

Questions about your specific rate? Contact your local finance office or your installation's Country Allowance Coordinator.

*At the time of this article, the CY 2026 spendable income tables are unpublished. The example uses the January 2026 COLA indices with CY 2025 spendable income tables. The amount may vary when using the published CY 2026 spendable income tables.

Suggested reads:

• 2026 CONUS COLA Rates: Eligibility, How Much Pay Is Cut, and What to Expect
• DoD Confirms 2026 BAH Rates After Brief Leak: Here's What's Changing
• The End of the Penny & How It Will Affect Prices at Exchanges