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Living Quarters Allowances (LQA)

LQA is a tax-free allowance to pay for living quarters and utilities while overseas. Eligibility for LQA is based on the employee’s status when applying for an overseas (foreign area) position. Employees hired from stateside will typically receive LQA, but it is important that all employees consult HRO because of the rules and regulations governing LQA eligibility. LQA will start on the effective date of the housing contract or the 91st day after the commencement of TQSA. LQA is based on the local housing market, the exchange rate, the employee’s grade and whether he or she is accompanied by dependents. LQA can fluctuate as often as every pay period because it is based on the exchange rate.

LQA is designed to cover substantially all the living expenses including rent and standard utilities (i.e. heating fuel, gas, electricity, water, sewage, etc.) and taxes levied by the local government and required by law or custom to be paid by the lessee. Rent may include, in addition to the basic annual rental, the cost of other rentals and fees paid by tenants; employees must consult HRO on this matter. If expenses exceed the maximum LQA an employee is authorized, he/she will be required to pay those expenses on out of pocket. LQA rates for Bahrain are adequate to cover typical rentals and utilities in their respective areas.

Be advised that an employee may be required to pay the equivalent of four-month’s rent when he/she signs an off-base housing contract. These fees normally include first month's rent, the Security Deposit, the Landlord's Fee and the Agent's Fee. Since the Security Deposit is considered a refundable expense, it cannot be included under LQA. Employees may claim payment for the Landlord's Fee and Agent's Fee immediately after signing the house contract by providing HRO the proof of payment for reimbursement. However, these payments may affect the employee’s biweekly LQA payment as they are reimbursed through LQA. Employees may also request advance pay to cover the lease expenses. Employees should contact HRO before signing rental agreement for information and recommendations concerning the specific situation. HRO will assist employee on allowances, entitlements, and submission of necessary forms for reimbursement.

LQA for Bahrain:
U.S. Dept. of State Office of Allowances

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