Allowances
Allowances are funds provided to servicemembers to offset certain expenses. If the government is giving you an allowance, it is not “free money,” it is intended to pay a specific expense. Fortunately the military provides allowances for housing and food (if they are not providing you with housing and food). If you understand that the average American spends about 30% of their income on housing, you understand that receiving housing from the government (or a housing allowance) is like getting a 30% pay raise. Another nice thing about allowances is that they are not subject to any taxes; you get to keep every dollar of your allowances to pay the expenses they are intended to pay.
The two most common allowances are the Basic Allowance for Housing (BAH) and the Basic Allowance for Subsistence (BAS). There are serval other allowances that you may receive at some point (e.g., Family Separation Allowance, Dislocation Allowance, Move-in Housing Allowance, etc.), but every service member will receive BAH and BAS every month (or they will be provided housing and/or meals "in kind").
Basic Allowance for Housing
Free Housing… or more money: Basic Allowance for Housing (BAH).
At the very start of their career, most servicemembers will initially live in government-provided quarters (barracks/dormitories). That is, they will be given a place to live by the military and will not have to pay for this major expense. The fact that the military provides free room and board to all service members (or a payment for servicemembers to pay for their own meals and/or housing) is an enormous financial benefit and a great advantage over almost any civilian employer.
Housing "in kind" or money
As you grow in your careers and/or family, you will eventually move out of the barracks, ship, dormitory and into a home. This home may be provided by the government (on-base housing) or it may be a private home. If the military does not provide you with housing “in kind” –that is, either a room in the barracks or family quarters on post– you will be given money to pay rent for a private home (including utilities!).
Importantly, BAH (unlike the Basic Allowance for Subsistence, or “BAS”) is intended to accommodate the whole family, not just the servicemember.
BAH is a fundamental component of the military pay package designed to offset housing costs for Service members renting off-base on the local market economy. By law, BAH is determined based on “the costs of adequate housing for civilians with comparable income levels [to military Service members] in the same area.”
How much money
Housing costs vary significantly between markets. Housing is San Francisco is going to cost significantly more than the national average of $1221.09 a month. Conversely, housing in rural Arkansas is going to be significantly less than the average. Fortunately, Basic Allowance for Housing (BAH) varies by location to account for the different cost of housing in different markets.
BAH rates are determined by surveying renters in each local market for their cost of rent and utilities, so most of the people in that area are covering their housing costs for the BAH amount; you should be able to do the same.
BAH rates are designed to reflect the median housing costs facing civilians in the local housing market. This means that approximately 50% of the local population (including Service members) can be expected to rent above the median rent and 50% to rent below it.
BAH rates are computed each year using median market rents and average local utility expenditures (electricity, water/sewer, and heating fuel) for civilians in each local market area.
"Not enough money!"
You will, no doubt, hear some servicemembers say “BAH doesn’t come close to paying my rent.” Could an 18-year-old Soldier choose to rent a 4,000 square foot five-bedroom home? Sure! Will their BAH cover that expense? Absolutely not! BAH is not intended to provide luxurious accommodations, but it does provide for your needs. Again, you will be provided government housing, or money to house you and your family.
Members are free to economize (and save a portion of their BAH) by renting below the market median costs, or to upgrade (and pay out-of-pocket) by renting above the market costs. Member housing preference and choice do not affect BAH rates.
If you get married early in your service, you will be given a housing allowance that allows you to rent a 1-bedroom apartment. After promotion to E-5, you will be paid for an amount that allows you to live in a 2-bedroom townhouse (or duplex). When you are promoted to E-6, you would be paid enough to rent a 3-bedroom.
Basic Allowance for Subsistence
All Your Meals are Free… or you get more money: Basic Allowance for Subsistence (BAS)
The servicemember is either provided meals “in kind,” or paid a Basic Allowance for Subsistence, commonly known as “separate rations.”
This allowance is intended to feed the servicemember, so it does not provide additional money to feed any family members you may have.
Many servicemembers simply think of this as “food money,” and are surprised (upset!) when this money is not included in their paycheck whenever they are provided their meals (such as when they are being fed on a ship, “in the field” on a training exercise, or deployed to combat). Remember, this is money to feed the servicemember. You can set yourself up for disappointment if you simply think of this as extra money because it can –and will– stop if the military is feeding the servicemember. If you are ever hospitalized in a military hospital, in addition to providing all of your healthcare at no cost, the military will obviously feed you; this is another circumstance where your BAS will be stopped because you are receiving meals “in kind.”
Subsistence (meals “in kind,” or a subsistence allowance) is provided to the servicemember 365 days a year – whether on duty or on leave. If you are taking vacation days (“taking leave”), you probably cannot eat in the mess hall. In this case, if you weren’t already being paid BAS, you will now be paid a subsistence allowance while on leave.
"Per Diem"
One quirk of subsistence payments arises when you travel on Temporary Duty (TDY).
Whenever you need to serve away from the post/camp/base where you normally live, the government will pay for you to stay in a hotel (if you cannot stay in military facilities); the government will also pay you to eat in restaurants (if you cannot eat in a military facility).
The money paid for lodging, meals and incidental expenses is called “per diem.” Per diem amounts vary by location to account for the fact that meals and hotel rooms in New York City, for example, cost more than meals and hotels in Muskogee, Oklahoma. Regardless of where the military sends you on your TDY, the part of your per diem intended to cover “meals and incidentals” is typically fairly generous. You won’t be able to eat lobster every day, but you won’t need to eat fast food every day either.
This money is paid in addition to your BAS (so you will still receive your full BAS). Remember: if the military is making you sleep in a tent, you’ll probably get less money in your check that month (because they are feeding you and your BAS is stopped), but if they make you sleep in a hotel, you’ll get extra money (to pay the higher cost of meals in a restaurant).
They WILL Feed My Family?!
Another quirk of subsistence payments arises when you make a Permanent Change of Station (PCS).
If you are moving between duty stations with your family, the government is effectively telling your family members that they need to be on the plane or in the car with you.
Because the military is, in essence, telling your family members where to be, the military will pay you additional money to feed your family.
While driving to your new location, family members who are 12 and older will receive 75% of the authorized per diem amount; dependents under the age of 12 receive 50% of the authorized per diem.
In 2026, you will be paid an extra $68 per day that you are travelling to pay for meals. Your spouse (and any other family member 12 years or older) would receive $51 per day and family members under 12 would receive $34 per day.
So, a family of two parents and a baby would receive an extra $153 every day while travelling between duty stations. This money is paid in addition to your BAS.
The Per Diem Paradox:
Sleeping in a tent = less money
Sleeping in a hotel = extra money