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Salary Inflation Calculator
COLA & Adjustments

COLA Calculator

Calculate a cost-of-living pay adjustment.

COLA Calculator: Scenario Inputs

Live Model
$
%

Annual percentage rate or benchmark index change.

3y
%
Computed Results

Inflation & Purchasing Power Analysis

Real Adjusted Value
$67,645
Effective base purchasing power
Purchasing Power Loss
-$7,355
-9.81% cumulative loss
Target Inflation Break-Even
$83,154
Salary needed to keep pace
Net Real Wage Growth
-1.45%/yr
Nominal raise vs price index

Over 3 years at 3.5% inflation, a $75,000 salary requires $83,154 to retain equal purchasing power. Without matching raises, your real compensation experiences an effective reduction of $7,355 (-9.81%).

Need complete multi-year compound modeling?

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Main Calculator

How COLA Calculator Works?

The COLA Calculator works by measuring the price-index change over the reference period and applying the same percentage to pay.

  1. Enter current pay

    Type the salary, wage or benefit amount.

  2. Pick the index

    Choose CPI-U, CPI-W or another index.

  3. Pick the reference period

    Choose 2 months, 2 quarters or 2 annual averages.

  4. Read the COLA

    The output shows the COLA rate, the dollar increase and the new pay.

COLA Calculator Formula

The COLA formula divides the current index value by the prior index value, subtracts one and applies the result to pay.

COLA rate

COLA = CPIcurrent ÷ CPIprior − 1

New pay

New Pay = Pay × (1 + COLA)

Variables

CPIcurrent, CPIprior
Index values for the 2 reference periods

Worked example

CPI-U annual averages of 304.702 (2023) and 313.689 (2024) give a COLA of 2.95%. A $58,000 salary rises to $59,711.

COLA Calculator Conversion Table

This table applies a 2.95% COLA to 6 pay levels.

Current payCOLA increaseNew payMonthly increaseHourly increase (2,080 hours)
$25,000$737$25,737$61.45$0.35
$40,000$1,180$41,180$98.31$0.57
$58,000$1,711$59,711$142.56$0.82
$75,000$2,212$77,212$184.34$1.06
$100,000$2,949$102,949$245.79$1.42
$140,000$4,129$144,129$344.10$1.99

CPI-U annual averages: U.S. Bureau of Labor Statistics.

What is COLA Calculator?

The COLA Calculator is a tool that calculates a cost-of-living adjustment (COLA), the pay increase that matches the change in a price index over a set period. A COLA protects purchasing power and is separate from merit raises.

The Social Security Administration (SSA), many pension plans and many union contracts pay a yearly COLA.

What are the uses of COLA Calculator?

There are 4 main uses of the COLA Calculator.

  • Set yearly COLAs

    Calculate the COLA for staff, pensioners or contracts.

  • Separate COLA from merit

    Show the inflation part of a raise on its own.

  • Check benefit increases

    Verify COLAs on pensions and benefits.

  • Prepare raise requests

    Ask for a COLA backed by an official index.

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Apply a specified adjustment to prior pay periods.

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Model recurring cost

Capped COLA Calculator

Apply a maximum adjustment rate.

Floored COLA Calculator

Apply a minimum adjustment rate.

Capped-and-Floored COLA Calculator

Apply both adjustment limits.

Lagged COLA Calculator

Apply inflation from an earlier reference period.