Allowances
- - Allowances Overview
- - Allowances
- - Services Overview Video
- - Allowances
  - Cost of Living
  - Housing
  - Tax
- - Transportation
  - Furnishing Rental & Allowance
- - Services Overview Video
  - Learn how AIRINC can partner with you to provide a strategic, personalized plan of action as well as the information you need to initiate the assignment.
Solutions
- - Solutions Overview
- - Decision Making Tools
  - Assignment Cost Estimator
  - Host Pay Calculator
  - Lump Sum Calculator
  - Short-Term Allowance Calculator
  - Salary Evaluation Tool
  - AIMS - Mobility Decision Guide
  - Domestic Solutions
  - Balance Sheet for Expatriates
- - Reference Tools
  - International Assignment Allowances for Individual Assignees
  - International Housing Guide
  - International Tax Guide
  - Destination Reports
- - Compensation
  - Compensation Overview
  - Global Reward Index Calculator
  - Geographic Differential Index
  - Salary Evaluation Tool
  - Inflation Impact Analysis
- - Services Overview Video
  - Learn how AIRINC can partner with you to provide a strategic, personalized plan of action as well as the information you need to initiate the assignment.
Advice
- - Advice Overview
- - Services Overview Video
  - Learn how AIRINC can partner with you to provide a strategic, personalized plan of action as well as the information you need to initiate the assignment.
Benchmarking
Resources
Events
Contact
Ready to Talk?

Allowances
- - Allowances Overview
- - Allowances
- - Services Overview Video
- - Allowances
  - Cost of Living
  - Housing
  - Tax
- - Transportation
  - Furnishing Rental & Allowance
- - Services Overview Video
  - Learn how AIRINC can partner with you to provide a strategic, personalized plan of action as well as the information you need to initiate the assignment.
Solutions
- - Solutions Overview
- - Decision Making Tools
  - Assignment Cost Estimator
  - Host Pay Calculator
  - Lump Sum Calculator
  - Short-Term Allowance Calculator
  - Salary Evaluation Tool
  - AIMS - Mobility Decision Guide
  - Domestic Solutions
  - Balance Sheet for Expatriates
- - Reference Tools
  - International Assignment Allowances for Individual Assignees
  - International Housing Guide
  - International Tax Guide
  - Destination Reports
- - Compensation
  - Compensation Overview
  - Global Reward Index Calculator
  - Geographic Differential Index
  - Salary Evaluation Tool
  - Inflation Impact Analysis
- - Services Overview Video
  - Learn how AIRINC can partner with you to provide a strategic, personalized plan of action as well as the information you need to initiate the assignment.
Advice
- - Advice Overview
- - Services Overview Video
  - Learn how AIRINC can partner with you to provide a strategic, personalized plan of action as well as the information you need to initiate the assignment.
Benchmarking
Resources
Events
Contact
Ready to Talk?

Why Do Cost of Living
Allowances (COLA) Fluctuate

AIRINC-COLA Fluctuate-Charting up

Impact of Exchange Rates/Inflation

Increased COLA is the result of:

Devaluation of home currency
Host inflation is higher than home

Decreased COLA is the result of:

Devaluation of host currency
Host inflation is lower than home

Learn More

How to Address These Changes

Why should the COLA increase?

Assignee’s contribution from salary now covers a smaller percentage of host goods and services costs
Company should increase COLA to make up the gap

Why should the COLA decrease?

Assignee’s contribution from salary now covers a higher percentage of their host goods and services costs
Company should reduce COLA to not overcompensate the assignee

Learn More

What is the Impact?

Help your assignees understand the impact of exchange rate changes and inflation. Remind them that:

Assignees are expected to contribute from salary; COLA makes up only a portion of total host goods and services expenditures
Changes in exchange rates and relative (host compared with home) inflation impact total host goods and services expenditures (home salary contribution plus COLA), but only COLA flexes up or down to ensure the assignee has sufficient funds to support the host goods and services expenditure. This means a 10% exchange rate change does NOT equal a 10% change in COLA. Percentage changes in COLA will be greater than the percentage changes in inflation and/or exchange rate. However, COLA changes can be easily reconciled by comparing the change in the total host goods and services expenditure

Tools That Can Help

Use the International Assignment Calculator to:

AIRINC-COLA Fluctuate-Giant calculator

Manage and update your assignee allowances online

Read more

Ensure that allowances are correctly updated to ensure the right level of goods and services support

Read more

Ensure you have the most up-to-date COLA— the data in the International Assignment Calculator can be updated semi-annually, annually, or per client-specific schedules

Read more

Schedule a Free Consultation

Learn More About Cola

Share This