Money

What Does That Mean? LES/Financial Acronyms

Oh my gosh, there is even an acronym in the title! It means Leave and Earnings Statement which I will go into further. This article is one of 7 articles that will give you a better understanding of all the acronyms the military uses. I’m making these a little shorter than many of the other articles I have written so far because there is a lot of information.

Leave and Earnings Statement (LES)-This statement is basically a pay stub. It tells you and your spouse how much he makes and breaks down all of your pay entitlements. It tells you how much leave your spouse has, tax information, and some military retirement plan information such as the percentage of their pay that is going into Thrift Savings Plan (TSP). There is a TSP statement that gives more detailed information on your spouse’s TSP account.

Thrift Savings Plan (TSP)-Think of this as an employer 401k. Your service member is opted into this if they are in the new BRS retirement system but if they are in the old High-3 system they have to sign up for it. Either way it will show you how much is in the TSP account, how much has been earned in that year, the funds you’re in and if you have Roth or Traditional TSP. This will be another article because there is so much exciting stuff to know about TSP so let’s circle back to some more things on the LES.

Base Pay-This is the pay your spouse gets for their rank(the funny shapes on their sleeves or collar) and the amount of time they have been in. When the funny shape changes and/or they get more years in the military, the base pay will change as well. It is currently taxed.

Basic Allowance for Housing (BAH) or Overseas Housing Allowance(OHA)-This is money the government pays you for housing. Stateside you get the full amount of BAH regardless if your house is $100 under or $100 over your BAH amount. We try to find a place that is a little cheaper than our BAH so we can cover our utilities for most months. OHA is for overseas locations. You don’t get to pocket that money to help with utilities but you will get a couple other entitlements for living overseas. We try to get as much house as we can, as houses in other counties tend to be smaller and don’t fit our giant American stuff. Note that you do not get this allowance if you live on base unless it is privatized base housing then you get the allowance but then you pay the company that runs it. Yeah, I don’t know why they just don’t keep your BAH, maybe I’ll find out if anyone wants to know. It is a tax-free allowance.

Utility Allowance-Is for overseas only and it’s used to pay for utilities. Note that in Europe if you have oil, you will have to fill it up usually every 6-12 months depending on your usage. Put money in an account for this so you are prepared to pay the lump sum for your oil. It is a tax-free allowance ONLY for when you are overseas.

Cost of Living Adjustment (COLA)-Funny story…I know what this means but I had to look up what the acronym stood for because I forgot. The point is you may not know what every single letter to the acronym is but as long as you understand what it means to your family, that is the important part. So, COLA is the money you get for living overseas depending on the host country’s currency. It is a tax-free allowance ONLY for when you are overseas.

Basic Allowance for Subsistence(BAS)-This money for food. It may not cover the food expenses for a teenage boy though. You get it throughout their military career tax-free and it is for all locations.

Servicemembers’ Group Life Insurance (SGLI)-This is basically in life insurance that covers your spouse for while they are in the military. It is low cost and there is an option to get coverage for yourself and children called FSGLI.

Tricare-This is the military healthcare system. This is not on the LES but it is one of the benefits your family receives. Yay, free health care. You can be seen at the base medical facility and if it is beyond what they able to offer they will send you to a doctor off base which is called a referral. You can go to the nearest emergency room for life-threatening or urgent injuries and take care of Tricare later. If it does not fall into these injuries you have to route everything the base medical facility and Tricare or you may pay out of pocket.

Please let me know if this was helpful or if there is a common Financial/LES acronym I left out. Note that I left out things like flight pay or sea pay because not every service has those options. Below are some websites and tables that may be helpful.

Base Pay Chart https://militarypay.defense.gov/Portals/3/Documents/ActiveDutyTables/2019%20Military%20Basic%20Pay%20Table.pdf

BAH Calculator https://www.defensetravel.dod.mil/site/bahCalc.cfm

OHA Calculator https://www.defensetravel.dod.mil/site/ohaCalc.cfm

COLA Calculator https://www.defensetravel.dod.mil/site/colaCalc.cfm

Military Compensation Website(Has great information) https://militarypay.defense.gov/

4 thoughts on “What Does That Mean? LES/Financial Acronyms”

  1. As a military spouse I think you for writing this to break out this information. I used to give classes on this when I worked in the housing office and it was sad to see so many young military spouses who did not know the basics. Soldiers are taught this stuff but spouses are not. Great Job!!!!

    Like

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