The OpSec Blog

Security and privacy information and advice at home and abroad.

RQ: Locality Pay, Danger Pay, COLA

with one comment

This week’s reader question asks,

What are the different kinds of pay you earn overseas?  Do you get a cola?  Do other places besides Iraq and Afghanistan get danger compensation similar to the military’s hazardous duty pay?

There are three main types of overseas compensation: cost of living adjustment (COLA), danger pay, and hardship pay.COLA, or cost of living adjustment, gives you an additional percentage of your salary based on an index of prices for common items in the states compared to your foreign locality.  In more expensive places (Europe, certain parts of Asia, and sub-Saharan Africa) your COLA could be substantial; above 30% is not uncommon.  Obviously in less expensive countries you will not have a COLA.  COLA is not taxed.

Danger pay is also a percentage of one’s salary and is based on whether your post is designated as being eligible for danger pay.  Danger pay can add 15 – 35% of your salary to your paychecks.  Many posts are eligible for danger pay, with Iraq, Afghanistan, and Pakistan being the obvious examples.  Other danger pay posts include those in northern Mexico, sub-Saharan Africa, and certain posts in the Middle East.  Danger pay is not taxed.

Hardship pay, or Post Hardship Differential, is compensation for adverse living conditions at a post.  This is usually justified by pollution, sanitation issues, or lack of equivalent comforts as you would find in the United States.  Posts in which personnel are not allowed to leave the compound without prior authorization also usually qualify for hardship differential.

There are numerous other allowances based on family size, eligible family members, education, or if you live out of US government-provided housing.  Details can be found on the Office of Allowances website.


One Response

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  1. COLA is a percentage of “disposable income”, not salary/base pay. Danger pay is taxed.


    21/12/2011 at 14:37

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