Expat COLA (Cost of Living Adjustment) Calculator
Cost of Living Adjustment (COLA) compensates expats for higher cost of consumer goods in host country. Different from housing allowance — covers food, transportation, education, healthcare. Indexed via ECA, AIRINC, or Mercer surveys.
How COLA Is Calculated
COLA applies to the 'spendable income' portion of base salary — typically 40% (food, transport, recreation, services). Housing, education, healthcare, and savings are excluded (separately compensated or non-discretionary). Formula: spendable income × (host city COLA index / 1.00 - 1).
Hardship Premium Categories
Standard postings: 0% hardship. Modest hardship (Beijing, Moscow): 10-15%. Significant hardship (Lagos, Karachi): 20-25%. Extreme hardship (war zones, isolated postings): 30-40%. Premium covers security risk, climate extremes, lack of amenities, family disruption. ECA International publishes hardship surveys annually.
When COLA Is Negative
Postings to lower-cost countries (Buenos Aires, Manila, Bangalore) trigger negative COLA — but most expat policies don't reduce salary. Instead, allowance is zero. Some companies offer 'efficient purchaser' premium when host cost is lower than home, allowing expats to save more.
Source: ECA International COLA Survey 2025, AIRINC International Assignment Data. Last updated: May 2026.