Cost of Living Raise Calculator

About this calculator

A cost-of-living adjustment (COLA) is a salary increase intended to keep pace with inflation so that a worker's real purchasing power stays flat rather than eroding as prices rise. It is typically calculated by applying the inflation rate — often the change in the Consumer Price Index over the prior year — directly to the current salary, distinguishing it from a merit raise, which is meant to reward performance rather than simply offset rising costs.

COLAs show up formally in union labor contracts, government pension and Social Security adjustments, and many corporate compensation policies, precisely because a salary that never adjusts for inflation is a quiet pay cut every year prices rise faster than wages. This calculator takes your current salary and the inflation rate to compute the salary needed to keep pace and the exact raise amount that represents.