The Cost of Living Adjustment is given once per year, at the start of the year. This is generally announced in the national Budget. Read: What is the difference between the Cost of living allowance and the Cost of living Adjustment?
This COLA needs to be added over and above the employees’ salaries, unless the employee is receiving a salary increase which is inclusive of COLA.
You may adjust salaries by following either of these two methods:
- Setting up a new position history.
- Using the COLA wizard
To use the COLA wizard;
- Go to Settings page
- Click on the Payroll tab
- Click on the COLA Adjustment button
Here you will get a list of all your employees split by Hourly, Yearly or Contract, based on the setup of their position history (i.e. if they are paid by the hour or are given a yearly salary).
You will also see the “pre” and the “post” values - that is, the current salary and the salary which will apply once the COLA is given. To set the adjustment, simply click the “Add Adjustment” button
Once the Adjustment is given, you will notice that a new position history is set up for all the relevant employees, with a start date as 1st January and the salary is reflective of their current salary plus the annual COLA (or the hourly pro-rata if they are paid on an hourly basis).
Note: If this update doesn't apply to you then you can just click the Dismiss button.