Basic Allowance for Housing rates are updated annually depending on median rent and utility costs in the region where a service member is based. It’s important to note that BAH calculations are made according to the location of the service member’s base or duty station and not their primary residence.
A service member’s rank, pay grade, number of years in service and whether they have dependents determine their monthly disbursement. For example, an officer with dependents will generally receive a higher BAH rate than a single enlisted member in most cases.
It’s also important to remember that the allowance a service member receives won’t necessarily cover their exact housing expenses.
Let’s imagine an active duty member receives a $1,000 monthly allowance for housing. If he rents a two-bedroom apartment at $1,200 per month, he’ll need to come out of pocket for the extra $200. Conversely, if he decides to rent a cheaper apartment for $800, he’ll be free to reallocate the $200 that’s left over each month. In other words, BAH rates are independent of a service member’s actual monthly housing expenditure.