Cost of Living Adjustment (COLA)

Alasdair MacNeill
Alasdair MacNeill
  • Updated


The Cost of Living Adjustment is given once per year, at the start of the year. This is generally announced in the national Budget. The COLA needs to be added over and above the employees’ salaries, unless the employee is receiving a salary increase which is inclusive of COLA. 


To apply the COLA to your employees you will need the Manage Client Settings, Manage Payroll, and Manage Employment Position History permissions. Each of these must be set on global.


Adding COLA to employee salaries

COLA can be given to employees in different ways but depending on the context of your employees' situation, you may opt for a method that is most beneficial to you.

If you are applying the COLA adjustment with a pay increase also, it would likely be easier to make the 2 changes in one go and update the employee's employment position history with the salary change.

You may adjust salaries to apply the COLA only using either of these 2 methods:

  1. By clicking on the below banner which will reflect the details of the COLA for that new year. This banner will be displayed for payroll users throughout the months of December and January. This banner will be shown to users with Manage Payroll and Manage employment position permissions (globally):

  2. By using the COLA Adjustment Wizard

COLA Adjustment Wizard

If an employee has already received an increase which is inclusive of COLA then you will not need to apply this adjustment.

If you need to add the COLA to your employee using the COLA Adjustment Wizard, you can follow these steps:


The difference between the Cost of Living Allowance and the COLA?

You might have heard of the Cost of Living Allowance. This is different to the Cost of Living Adjustment. The Cost of Living Adjustment (COLA) is the slight increase in salary given at the beginning of each year following the Budget (Click here for more information). The Cost of Living Adjustment (COLA) is added as part of the employee’s gross salary at the beginning of the year.

The Cost of Living Allowance is the Government Weekly Allowance given to employees every March and September (Click here for more information).

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