What Is a Leave and Earnings Statement (LES)?

A Leave and Earnings Statement (LES) is the military equivalent of a pay stub. It details a service member’s monthly pay, deductions, allowances, and leave information. Both borrowers and lenders use the LES to verify income for a VA loan application.

According to the VA Lender’s Handbook (VA Pamphlet 26-7, Chapter 4, Section 1), lenders must verify stable and reliable income that’s likely to continue. The LES is a key tool in making that determination.

Why the LES Matters for VA Loan Qualification

The VA requires lenders to confirm that a borrower’s income is steady and sufficient to meet monthly obligations and residual income requirements. For service members, this starts with accurately reading the LES.

Failing to interpret it correctly can lead to under- or overestimating income—both of which may delay loan approval.

Key Sections of the LES That Affect Income

The Entitlement Box

In the upper left-hand corner of the LES, you’ll find the Entitlement section. This lists various types of pay and allowances the service member receives.

Focus on:

  • Base Pay – Regular salary tied to pay grade and years of service.

  • BAH (Basic Allowance for Housing) – Adjusted by duty station ZIP code and dependent status.

  • BAS (Basic Allowance for Subsistence) – A food allowance, typically consistent month to month.

Understanding Base Pay, BAH, and BAS

When determining qualifiable income, lenders usually include:

  1. Base Pay – Verified using the current LES.

  2. BAH – Based on the new duty station’s ZIP code (if the service member is relocating).

  3. BAS – Typically stable and can be included.

These three elements usually make up the foundation of qualifying income.

How ZIP Code and Dependents Impact BAH

BAH rates change based on location and dependent status. A move to a new duty station (PCS) can cause BAH to increase or decrease, which directly affects loan qualification.

Lenders should verify:

  • The ZIP code of the new duty station.

  • Whether the LES reflects with or without dependents status.

Use the official DoD BAH calculator to confirm current rates.

How to Calculate Qualifiable Income from an LES

To find total qualifiable income:

Base Pay + BAH + BAS = Qualifiable Monthly Income

Example:

  • Base Pay: $4,200

  • BAH: $2,100

  • BAS: $452
    Total Qualifiable Income: $6,752 per month

Consistent vs. Temporary Income

Only income that’s stable and likely to continue should be counted.
Temporary items like bonuses, hazard pay, or combat pay may be used only if verified to continue for the foreseeable future (VA Handbook, Chapter 4, Section 5).

Special Pays and Allowances

Some LES entries—like flight pay, sea pay, or incentive pay—can count if documentation shows continuity. Lenders should request a statement of service or verification from the commanding officer to confirm ongoing receipt.

Common LES Mistakes in Income Calculation

  1. Using current BAH from the wrong duty station (instead of future PCS location).

  2. Counting one-time or temporary pay as ongoing income.

  3. Ignoring dependents status changes, which can affect housing allowance.

  4. Misreading deductions (such as allotments or debts) as reductions in income.

Final Review for Lenders and Borrowers

Before submitting a VA loan application:

  • Double-check that the LES is current.

  • Confirm BAH matches the new duty station ZIP code.

  • Include only consistent and verified income sources.

A correct understanding of the LES helps ensure the borrower’s financial picture is accurate and compliant with VA standards.

Learn More Here: