Who sets OCONUS per diem rates, how per diem differs from COLA and Living Quarters Allowance, and the distinction that matters most to a contractor: these are federal traveler and employee entitlements, not something a contractor employee automatically receives.
OCONUS per diem is the maximum daily reimbursement for lodging and meals on official travel outside the continental United States. Three bodies set these rates: GSA for the contiguous states, the Department of Defense for Alaska, Hawaii and outlying areas, and the Department of State for foreign areas. These are government rates, not automatic contractor pay.
FAR 31.205-46, the clause governing travel costs on government contracts, names all three authorities directly. It states that lodging, meals and incidental expenses "shall be considered reasonable and allowable only to the extent that they do not exceed on a daily basis the maximum per diem rates in effect at the time of travel," and it defines those maximums by area.
| Area | Who sets the rate | Governing regulation | Where to look it up |
|---|---|---|---|
| Contiguous United States (CONUS) | General Services Administration (GSA) | Federal Travel Regulation (FTR) | GSA per diem rates |
| Alaska, Hawaii, and outlying US areas (non-foreign OCONUS) | Department of Defense | Joint Travel Regulation, Volume 2, DoD Civilian Personnel, Appendix A | Defense Travel Management Office (DTMO) |
| Foreign areas | Department of State | Standardized Regulations (Government Civilians, Foreign Areas), Section 925 (DSSR) | State Department foreign per diem lookup |
The GSA page states its role plainly: it establishes "the per diem rates that federal agencies use to reimburse their employees for lodging and meals and incidental expenses incurred while on official travel within the continental United States." Foreign rates come from the State Department's Office of Allowances, published monthly as separate lodging and meals-and-incidental-expenses components plus a combined daily rate, searchable by country or post name. For Alaska, Hawaii and US territories, the Defense Travel Management Office is the DoD source for both non-foreign OCONUS per diem and the separate OCONUS COLA calculator that readers searching that term are usually trying to find; we are naming it as the correct place to look, not stating any figure it currently shows.
No specific rate for any named post appears anywhere in this guide, because rates change on a regular cycle and the only correct source is whichever authority governs that location.
These four terms get flattened into "OCONUS money" constantly, and a hiring manager who conflates them will misquote an offer. Each has a distinct purpose, a distinct governing regulation, and often a different population it applies to.
Per diem is the maximum daily amount for lodging and meals while someone is on official travel, meaning temporarily away from their permanent duty station. It is governed by the FTR for CONUS, the JTR for non-foreign OCONUS areas, and the DSSR for foreign areas, depending on where the travel occurs. It is built for a traveler, not for someone permanently assigned to a post.
Cost-of-living allowance (called post allowance in the DSSR) is a supplement for personnel who are assigned to a location, not passing through it. It sits in the DSSR alongside per diem but answers a different question: not "how much does a trip cost" but "how much more expensive is ordinary living here than at home." It is not a travel reimbursement and does not use the per diem tables.
LQA covers housing costs for an assigned employee, separate from both per diem and COLA. It also sits in the DSSR, and its eligibility criteria are narrower than the other two. A GAO decision quoting the DSSR states LQA may be granted "to employees recruited outside the United States provided that... the employee's actual place of residence... shall be fairly attributable to his/her employment by the United States Government," or where an agency required the employee "to move to another area" as a condition of employment under DSSR 031.12c. In the case GAO reviewed, LQA was denied because the employee's move, while real, lacked the required management-generated action; a transfer the employee initiated or that happened for reasons other than an agency directive did not qualify. That is the pattern worth internalizing: LQA eligibility is specific and conditional, tied to how and why someone ended up at that post, not a general OCONUS housing benefit.
Danger pay and post hardship differential compensate for risk or difficulty at a specific location. They are calculated and published separately from per diem, COLA and LQA, and they answer a third question entirely: not travel cost, not cost-of-living, not housing, but risk and hardship at post.
Say this plainly, because it is the reason this page exists: per diem, COLA, LQA, and hardship pay are entitlements for US government travelers, civilians and servicemembers. A contractor's employee is not automatically entitled to any of them.
FAR 31.205-46 is a cost-allowability rule, not a benefits statute. It tells a contractor what it may bill the government as an allowable travel cost, capping reimbursable lodging, meals and incidentals at "the maximum per diem rates in effect at the time of travel" using the FTR, JTR or DSSR figures as the ceiling. It says nothing about what a contractor must pay its own employee. What that employee actually receives, whether it is a flat OCONUS differential, a housing stipend structured to look like LQA, a per diem-style daily rate, or nothing beyond base salary, is set entirely by the contractor's own compensation plan and by whatever the prime contract or task order actually funds. Two contractors delivering on the same program, at the same post, can pay two entirely different allowance structures to two employees doing similar work, and both can be compliant, because the government regulation is capping what gets billed, not dictating what gets paid.
This is also why a candidate coming from active duty or federal civilian service, and expecting COLA or LQA as a matter of course, is often surprised by a contractor offer. The number they remember from their last assignment was a government entitlement tied to their status as a government employee or servicemember. It does not travel with them into a contractor role unless the contractor has chosen to build something equivalent into the offer.
No specific rate for any location is used here. This shows how the ceiling works mechanically, with a labeled hypothetical input, not a real number for any real post.
Suppose a contractor sends an employee on a 10-day temporary duty assignment to a foreign post, and suppose (hypothetically, for illustration only) the applicable combined per diem rate at that post, pulled from the State Department lookup at the time of travel, is $X per day.
That is the whole mechanism: pull the real rate for the real location on the real date from the authority that governs it, multiply by days traveled, and treat the result as a ceiling on billable cost, not as a number the contractor's own compensation plan is obligated to match.
| Step | What to check | Why it matters |
|---|---|---|
| Pull the current rate | Get the live rate for the exact location from GSA, DTMO, or the State Department lookup, not a memorized figure | Rates change on a regular cycle; last quarter's number is not this quarter's number |
| State the relationship to the government rate | Say plainly in the offer whether company pay references the government rate, exceeds it, or is unrelated to it | Candidates coming from federal service often assume the government figure carries over automatically |
| Confirm allowability with the CO and finance | Check what the specific contract or task order actually funds before the candidate conversation | FAR 31.205-46 caps what is billable; it does not obligate a specific payment structure |
| Recheck at renewal | Re-pull the rate before extending or renewing an assignment | A rate confirmed at hire is not guaranteed to hold through the life of the assignment |
Inside the published Government Contracting category, this comes up hardest for OCONUS / International roles, Logistics, Skilled Trades, and Operations, since these are the roles most likely to involve assignment to a foreign or non-foreign OCONUS post rather than a single domestic trip. It is worth saying directly: we run searches for these roles across government contracting and OCONUS positions, including cleared and linguist searches under an SDVOSB framework, but we do not set, administer or advise on compensation, allowances or cost allowability. That determination sits with the contracting officer, finance, and the specific contract terms, not with a search partner.
For contractors weighing whether an OCONUS role should be staffed as an employee or through another structure, the distinction between employer of record and contractor arrangements is a related question worth working through before the allowance conversation even starts.
OCONUS per diem is a government reimbursement ceiling, set by GSA for the contiguous states, DoD for Alaska, Hawaii and outlying areas, and the State Department for foreign posts under FAR 31.205-46. COLA, LQA, and hardship or danger pay are separate DSSR entitlements for assigned government personnel with their own eligibility rules. None of these are automatic for a contractor's employee: FAR 31.205-46 caps what a contractor may bill, it does not set what a contractor must pay, and that gap is exactly where a hiring manager needs to be explicit before quoting anything to a candidate.
Not automatically. COLA (post allowance in the DSSR) is an entitlement for US government civilians assigned to a post, governed by the DSSR. A contractor's employee is paid according to their employer's own compensation plan and whatever the contract actually funds; they may receive something structured similarly, but it is not the same entitlement and does not attach to the job simply because the location matches a government post.
It depends on the location. For the contiguous United States, use the GSA per diem rates page. For foreign areas, use the State Department's foreign per diem lookup, searchable by country or post. For Alaska, Hawaii, and outlying areas, the Defense Travel Management Office publishes the applicable non-foreign OCONUS rates and the OCONUS COLA calculator. FAR 31.205-46 is the clause that names all three as the governing authorities.
No. Per diem is a travel reimbursement ceiling for lodging and meals on official travel, governed by the FTR, JTR, or DSSR depending on area. LQA covers housing costs specifically for an employee assigned to a post, governed by the DSSR, and its eligibility is conditional on how the employee came to be at that post, not a general travel benefit.
Only in special or unusual situations, and only up to the ceilings applicable to federal civilian employees, per FAR 31.205-46. Anything above the published maximum needs specific justification and is not routinely allowable.
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