How BAH Is Calculated in 2026

BAH — Basic Allowance for Housing — is the tax-free monthly payment covering housing costs for service members. It varies by three factors: your Military Housing Area (MHA), your pay grade, and whether you have dependents.

The Defense Travel Management Office (DTMO)↗ surveys rental costs in each of the 299 MHAs annually. They collect data on median rental prices for apartments and townhouses appropriate to each pay grade, then set rates accordingly. Rates are published every December for the following calendar year and take effect January 1.

Here's what most people get wrong: BAH is based on your duty station ZIP code, not where you actually live. Stationed at Camp Pendleton but renting in Temecula? You still get the Camp Pendleton BAH rate. Some service members strategically choose lower-cost housing within commuting distance to pocket the difference — this is legal and common.

And why it changes every year

BAH is also protected by a rate floor — if rates decrease year-over-year in your MHA, you're grandfathered at the higher rate as long as you maintain continuous eligibility. This protection resets if you PCS, change dependency status, or have a break in service.

The 2026 rates reflect a 4.2% average increase nationally, though actual changes vary significantly by location. Outer Banks, NC saw the highest increase at 14.46%, while Austin, TX saw rates decrease by 6.19%. Remember: BAH is designed to cover approximately 95% of local housing costs — not 100%. The 5% gap is intentional.

For international locations, service members receive OHA↗ (Overseas Housing Allowance) instead of BAH. OHA operates under a completely different system with quarterly adjustments based on local rental markets abroad.