Cost of Living Allowances / COLA
What is included in the COLA?
The COLA is based on a specific group of good and services called the market basket. The cost of the market basket in the home location is compared to the cost of a similar one in the host location. The difference is the COLA.
The market basket covers a broad range of goods and services, often including: food at home, household supplies, personal care, clothing, medical care, telephone, home furnishings, domestic help, transportation, recreation & entertainment, food away from home, alcohol and tobacco. Items in each of these categories are collectively referred to as the market basket.
Taxes, housing and utilities, education, and automobile purchases are often not included in the market basket, and are typically paid for separately by the employer.
