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.
- How to set up
- COLA Wizard
- COLA Rates
- What is the difference between the Cost of Living Allowance and the Cost of Living Adjustment?
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.
How to set up
You may adjust salaries by following either of these three methods:
- Either by setting up a new employment position (in which case, you do not need the Manage Client settings and Manage Payroll permissions);
- By using the COLA wizard; or
- By clicking on the below banner. 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):
- Go to the Settings section;
- Click on the Payroll tab;
- Click on the COLA Adjustment button.
Here you will see a list of all your employees split by hourly rate, yearly salary 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 two values under the Salary heading. The first figure is the value of the salary before the COLA and the second is the value of the salary after the COLA is applied to the salary. To apply the adjustment, simply click the Apply Adjustments button:
You can choose to add the adjustment to specific employees by unticking the tick box near the employee name:
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 an employee has already received an increase which is inclusive of COLA then you will not need to apply this adjustment.
Each year, following the Budget announcement, a new cost of living adjustment is announced. The below table displays the rates of the past 3 years:
|Effective Date||COLA increase|
|1st January 2023||€9.90/week|
|1st January 2022||€1.75/week|
|1st January 2021||€1.75/week|
|1st January 2020||€3.49/week|
What is the difference between the Cost of Living Allowance and the Cost of Living Adjustment?
You might have heard of the Cost of Living Allowance. This is different to the Cost of Living Adjustment. The Cost of Living Adjustment 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 is added as part of the employee’s gross salary at the beginning of the year.