The Federal Government pays nonforeign area cost-of-living allowances (COLAs) based on differences in living costs between the allowance areas and the Washington, DC, area. Section 5941 of title 5, United States Code, limits COLAs to a maximum of 25 percent of basic pay. COLAs are exempt from Federal income tax but may be subject to State and local taxes. COLAs do not count for Federal retirement purposes.

NOTE:  The effective date of the COLA rates listed in the table below is the first day of the first applicable pay period beginning on or after June 30, 2008.