Cost of Living Adjustment (COLA) Calculator
Find your new salary after a COLA increase.
Results update as you type.
How it works
A cost-of-living adjustment, or COLA, raises salaries, pensions, or benefits by a percentage to keep pace with inflation, and this calculator shows the effect. You enter your current salary or benefit amount and the COLA percentage, and it returns your new amount, the annual increase, and the monthly increase. The calculation multiplies your current amount by one plus the percentage. COLAs are common in several contexts: Social Security benefits receive an annual COLA tied to inflation, many union contracts and government pay scales include them, and some pensions and long-term contracts adjust payments this way. The purpose is to preserve purchasing power, since inflation erodes what a fixed amount can buy over time; a COLA equal to inflation keeps your real income roughly constant, while a COLA below inflation means a real pay cut despite the nominal increase. Seeing the annual and monthly increase helps you understand and budget for the change, and comparing the COLA to the current inflation rate shows whether it truly keeps you whole. This calculator works for any percentage adjustment, so you can also use it to project a raise or model different COLA scenarios. Note that taxes apply to increased income, so your take-home rise is somewhat less than the gross increase shown. Enter your current amount and COLA percentage to find your new amount and increase.
New amount = current × (1 + COLA% / 100)
A cost-of-living adjustment increases pay or benefits by a percentage to offset inflation. The new amount is the current amount times one plus the COLA percentage. The annual increase is the difference, and the monthly increase is that divided by twelve.
Source:Percentage increase
We review all our tools from time to time to ensure accuracy.
Worked example
How to use this calculator
- 1
Enter your values
Enter current salary or benefit and cola percentage.
- 2
Adjust the options
Fine-tune any options to match your situation.
- 3
Read your result
New salary or benefit updates instantly as you type — no button to press.
Frequently asked questions
What is a cost-of-living adjustment?
A cost-of-living adjustment, or COLA, is an increase to salary, pension, or benefits by a percentage intended to offset inflation and preserve purchasing power. Social Security, many pensions, union contracts, and government pay scales use COLAs. It ensures a fixed income does not lose value as prices rise over time.
How is a COLA calculated?
Multiply your current amount by one plus the COLA percentage. For a 3 percent COLA on $60,000, the new amount is $60,000 times 1.03, or $61,800, an increase of $1,800 per year. The calculator also breaks this into a monthly increase so you can see the change in each paycheck or benefit payment.
Does a COLA keep up with inflation?
It depends on how the COLA compares to actual inflation. A COLA equal to the inflation rate keeps your real income roughly constant. A COLA below inflation means your purchasing power still falls despite the raise, effectively a real pay cut, while a COLA above inflation increases your real income. Compare the COLA to the current inflation rate.
How is the Social Security COLA determined?
The Social Security COLA is set annually based on a measure of consumer price inflation, so benefits rise roughly with the cost of living. The exact percentage varies each year with inflation and can be zero in low-inflation years. This calculator applies whatever COLA percentage you enter to your current benefit amount.
Is the COLA increase taxed?
Yes, an increase to taxable salary or benefits is subject to income tax like the rest of your income, so your take-home increase is somewhat less than the gross increase this calculator shows. The exact after-tax amount depends on your tax bracket and situation. Consider this when budgeting for how much extra you will actually receive.