Post Allowance: Cost-of-Living for Overseas Federal Employees

If you’re a U.S. citizen civilian working for the federal government at a foreign duty station, the post allowance for overseas federal employees is a tax-free supplement that offsets the higher cost of everyday goods and services compared with what you’d pay in Washington, D.C. It’s authorized by 5 U.S.C. § 5924, calculated under the Department of State Standardized Regulations (DSSR), and paid biweekly alongside your salary.¹²

Who Qualifies

You need to be a U.S. citizen civilian employee officially stationed in a foreign area by your employing agency. The DSSR definition of “employee” is wide, covering ambassadors, Foreign Service officers, and staff across dozens of federal agencies, but the citizenship requirement is firm outside the narrow exceptions in DSSR Section 312.³

How you were hired matters. If your agency recruited you in the United States and sent you abroad on a permanent change of station, you generally qualify as soon as you report to post. Employees hired locally overseas have a harder test: they must show their residence at post is fairly attributable to U.S. government employment and that they were previously recruited in the U.S. by the federal government, an American firm, an international organization with U.S. participation, or a foreign government.⁴

Temporary duty doesn’t count. Anyone drawing a temporary subsistence allowance under 5 U.S.C. § 5923(1) cannot collect a post allowance for the same period.¹

“Foreign area” also has a specific meaning. It’s anywhere outside the continental United States and outside the nonforeign areas, which include Alaska, Hawaii, Puerto Rico, Guam, the Northern Mariana Islands, and other U.S. territories and possessions.⁵ If you’re posted to one of those nonforeign locations, a separate OPM cost-of-living program applies, not this one.

Who Counts as Family

Family size feeds directly into the payment, so the DSSR is specific. Eligible family includes your spouse or domestic partner, unmarried children under 21 (or children of any age incapable of self-support), and parents or siblings for whom you provide at least 51 percent of financial support. Stepchildren, adopted children, children under legal guardianship, and children of a domestic partner all count. A child placed for adoption qualifies if a U.S. court has granted temporary guardianship and specifically authorized the child to reside with the employee at the overseas post.⁶

How the Amount Is Calculated

The calculation starts with your spendable income: the portion of base salary you’d typically spend on goods and services rather than taxes, housing, retirement, insurance, and savings. The Department of State publishes spendable income tables by annual base salary and family size.⁷ Two GS-12s at the same post will end up with different allowances if one has a spouse and two children and the other is single.

Next comes the cost-of-living index for your post. Washington, D.C., is set at 100. An index of 130 means local prices for everyday goods run about 30 percent higher than D.C. That index maps to a post allowance class, which is the percentage of spendable income you receive. Classes run from 5 percent (indexes of 103 to 107) up to 160 percent (indexes of 256 to 265).⁸ At the highest-cost posts, the allowance can exceed the employee’s entire spendable income.

Housing and education are excluded from the index on purpose. Those costs are handled separately by the Living Quarters Allowance (DSSR 130) and the Education Allowance (DSSR 270). Folding them into the post index would double-count.⁹

Why Your Payment Moves

Exchange rates are the single biggest reason your payment can shift from one pay period to the next. When the local currency strengthens against the dollar, everything you buy locally costs more in dollar terms and the index rises. When the dollar strengthens, it falls. The Department of State updates post allowance rates on a biweekly cycle to track those swings.¹⁰ If you’re at a post with a volatile currency, expect the number on your LES to move.

The indexes themselves are built from actual price surveys at each post. Employees contribute through annual Living Pattern Surveys, which ask how and where you shop for specific goods and services.¹¹ Participating is the most direct way to influence what your post’s index reflects.

When Payments Stop or Drop

The allowance is tied to being at post. If you leave the country of assignment for any reason and stay away for 30 consecutive calendar days, your post allowance terminates on the 31st day. For employees with family, that termination only triggers once both the employee and all family members have been outside the country for the full 30-day window.¹²

Other endpoints, drawn from DSSR Sections 224 and 225:

Transfer: payment ends on the date you begin official travel under a transfer order, or the date you move into temporary quarters if a temporary quarters subsistence allowance is payable.
Leave orders with per diem (including home leave with a return to post): payment ends on the date you start that travel.
Leave orders without per diem: payment continues up to 30 calendar days, then ends on the 31st.
Separation: payment ends on your departure date from post or your last day of employment, whichever comes first.⁸

One useful exception. If you leave on official orders but your family stays behind, your agency head may authorize a reduced post allowance at the family-size rate for those still at post, as long as you continue paying the household expenses there.⁸

Filing With Standard Form 1190

Your claim goes on Standard Form 1190, the Foreign Allowances Application, Grant and Report.¹³ The same form covers every foreign-area allowance, so it functions as the master record for your overseas benefits. Your agency’s administrative portal or the GSA forms library will have the current version.

The form asks for your grade and step (to pin down the spendable income bracket), every eligible family member with dates of birth and relationship, and arrival dates at post for you and your dependents. Keep your travel orders or assignment notification within reach when you fill it out.¹⁴

When to File a Revised SF 1190

The initial filing isn’t the end of it. The Foreign Affairs Manual requires a revised SF 1190 whenever your circumstances change in a way that affects the allowance:

Family status changes — a dependent arriving at or departing from post, a birth, a child aging out at 21, a marriage, or a divorce.
Salary or classification changes that affect the calculation. A routine within-grade increase, promotion, or across-the-board pay adjustment does not require a new form.
Changes to temporary quarters expenses that affect the daily rate.
Any other change that affects eligibility or requires revision under the DSSR.

The revised form is due as of the date the change occurs.¹⁵ Delays, especially in reporting a family member’s departure, can produce overpayments your agency will collect back.

How You’re Paid

Submit the SF 1190 through your agency’s administrative channels, usually HR or the finance office handling overseas payroll. Some agencies accept digital submissions; others still want scanned copies. The paperwork is checked against your personnel file and travel authorizations before approval.

The allowance takes effect the date you report for duty at the foreign post or the date you otherwise meet all eligibility requirements. Once approved, it shows as a separate line on your Leave and Earnings Statement and is paid biweekly with your regular salary. Because 5 U.S.C. § 5924 authorizes it under regulations approved by the President, it’s excluded from gross income and doesn’t appear on your W-2.¹⁶

If Conditions at Your Post Change Suddenly

You don’t have to wait for the next scheduled survey when a currency crisis, local inflation spike, or supply disruption pushes prices out of line with your current index. Under DSSR Section 074.3, overseas posts can submit new Living Pattern Questionnaires and Retail Price Schedules to the Office of Allowances at any time to trigger an interim review. Filing an interim report doesn’t replace the next regular survey, but it can speed up an index adjustment.¹⁷ The submission comes from the post, not from individual employees, so raise it with your administrative officer or the chief of mission’s office.

Other Allowances That Travel With It

Post allowance covers everyday consumables. It’s one piece of a broader package, and all of these are filed through the same SF 1190:

Living Quarters Allowance (LQA) covers rent, utilities, required local taxes on housing, and related costs. That’s why housing is stripped out of the post allowance index.⁹
Education Allowance covers the extraordinary cost of providing adequate K-12 education for dependents when local schools aren’t equivalent to U.S. public schools, including tuition, boarding, and periodic travel between school and post.¹
Hardship Differential adds a percentage of basic compensation (DSSR 500) at posts with exceptionally difficult living conditions such as extreme climate, inadequate health facilities, or geographic isolation.
Danger Pay pays 15, 25, or 35 percent of basic compensation at posts designated for political violence or terrorism, and it replaces the portion of hardship differential attributable to the same risks so the two don’t overlap.¹⁸
Separate Maintenance Allowance helps cover the cost of maintaining your family away from post when conditions there are too dangerous, unhealthful, or adverse for dependents.¹

1
Office of the Law Revision Counsel. 5 USC 5924 – Cost-of-Living Allowances
2
U.S. Department of State. Office of Allowances
3
U.S. Department of State. Department of State Standardized Regulations – Section 030 Applicability
4
U.S. Department of State. Department of State Standardized Regulations – Section 031
5
U.S. Department of State. 14 FAM 510 – Foreign Service Travel Regulations
6
U.S. Department of State. Department of State Standardized Regulations – Section 040m
7
U.S. Department of State. Annual Spendable Income by Salary and Family Size
8
U.S. Department of State. DSSR 220 – Post Allowance
9
Defense Civilian Personnel Advisory Service. Overseas Allowances
10
U.S. Department of State. Post (Cost of Living) Allowance – DSSR 220
11
Defense Travel Management Office. Overseas COLA Data Collection and Surveys
12
U.S. Department of State. Post Allowance – DSSR Section 220
13
General Services Administration. Foreign Allowances Application, Grant and Report
14
General Services Administration. GSA Specific Instructions for Completing the Standard Form 1190
15
U.S. Department of State. 3 FAH-1 H-3210 – Allowances
16
Internal Revenue Service. Allowances, Differentials, and Other Special Pay
17
Office of Inspector General, U.S. Department of State. Audit of Select Cost-of-Living Allowances for American Employees Stationed in Foreign Areas
18
U.S. Department of State. 3 FAM 3270 – Danger Pay Allowance