Military households will receive an average increase of 5.4% in their basic housing allowance in 2025.

The Ministry of Defense announced the annual update on Friday and the new housing benefit rates will come into effect on January 1.

About one million military personnel per year receive BAH, either directly to obtain their own housing or indirectly as a payment to their installation’s privatized housing operator. The Pentagon estimates it will pay $29.2 billion in BAH payments in 2025, up from $27.9 billion in 2024, according to the announcement.

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The average increase of 5.4% is consistent with the average increase in 2024. In 2023, military budgets received an average increase of 12.1% after costs skyrocketed the previous year. The ministry did not give a predominant reason for the increase in 2025, which exceeds all levels from 2010 to 2022.

The BAH increase in 2025 also comes with a likely pay increase for military personnel.

On Friday, the House of Representatives approved a 4.5% increase in base pay for all ranks, along with an additional 10% increase for junior soldiers in grades E-1 to E-4. A joint committee of the House of Representatives and the Senate had already agreed on the wording of the bill.

Search for your 2005 BAH rate.

“Every single man and woman who serves in our armed forces has made the selfless choice to serve and protect our nation,” House Armed Services Chairman Mike Rogers of Alabama said in a statement Wednesday about the Pay raise and other provisions for troops in annual defense policy bill. “It is important that we ensure our military members and their families are taken care of.”

The proposed pay increase now requires full Senate approval and President Joe Biden’s signature.

Meanwhile, a given household’s BAH increase may not be the full average of 5.4%, or it may be higher, depending on geographic differences in housing markets that factor into rates that vary from region to region . In some areas, rates may even be reduced, but in this case, military personnel already living there can keep their existing rates.

To try to base rates on “high-quality, accurate current-year housing cost data,” the Defense Department collects information from government agencies, commercial subscription services that maintain rate databases, publicly available websites, and installation managers such as housing officials.

Rates apply to 299 military residential areas in the continental U.S., Alaska and Hawaii. Factors evaluated to determine a rate for each tier in a given area include rents of specific housing types and sizes, utility costs and “housing choices of civilians with comparable incomes,” according to the announcement.

The calculation is for the U.S. government to pay for 95% of military personnel’s housing and for troops to make up the remaining 5%, which amounts to about $90 to $202 per month out of pocket in 2025, depending on Rank and type of military member has relatives.

Related: Here are your BAH prices for 2024

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