A cost of living (COLA) is a salary supplement paid
The amount of COLA
should enable an expatriate to buy the same basket of goods
and services in the host place that they could buy in their country of origin. The basis for calculating a COLA is the Cost of Living Index (COLI), which indexes the cost of the same package of goods and services in different geographic locations. COLA is a simple and accurate method to measure the purchasing power of fluctuating wages and ensure equality.
cost of living index
Our cost of living indices measure the cost of 230 products and services in 13 different basket groups in 276 cities around the world. The data is collected by a team of research analysts who study comparable articles that are available internationally. A minimum of 3 prices for the same product brand/size/volume are used to determine the average price of each item in each location. Items are priced quarterly and tend to rise and fall with inflation. The 13 different basket categories are as follows:
Alcohol and tobacco: So these arealcoholic beverages and tobacco products
drink in the bar
Beer
cigarettes
locally produced spirits
Whiskey
came
Clothing: Clothing and shoe products.
to grab
Casual wear
Children’s clothing and footwear
jackets and hats
nightwear
shoe repair
Underwear
Communication
Phone rental and calling rates for home
Internet connection costs and service providers
Contract for mobile / mobile telephony and calls
Education
Nursery/kindergarten money
High School/College Fees
primary school fees
Tertiary study costs
Furniture & Appliances: Furniture, Household Items & Appliances
DVD player
Fridge freezer
Iron
Kettle, Toaster, Microwave
light bulbs
TV
Vacuum cleaner
Washing machine
Groceries: food, non-alcoholic drinks and cleaning products
baby consumables
baked goods
Baking
canned food
Cheese
Cleaning products
Dairy products
Fresh fruit
Fresh vegetables
Fruit juice
Frozen
Meat
Oil and vinegar
Pet food
prepared meals
sauces
seafood
Appetizer
Drinks without alcohol
Spices and spice
Health: General health, medical and medical insurance
Cost of consultation with general practitioners
Daily allowance for private rooms in hospital
over-the-counter medicines
Private health insurance/medical assistance contributions
Housing: housing, water, electricity, gas, home fuels, local rates and housing taxes
Local Ownership Fees/Taxes/Encumbrances
Miscellaneous: office supplies, household linen and general goods and services
Domestic help
dry cleaning
Linen
Office supplies
Newspapers and magazines
seals
Personal care: personal care products and services
Cosmetic Products
hair care
Moisturizer / Sunscreen
diapers
analgesic tablets
toilet paper
Toothpaste
Soap / Shampoo / Conditioner
Recreation and culture
Books
movie camera
ticket
DVDs and CDs
Sporting goods
theater entry
Restaurants, eating out and hotels
Business dinner
Dinner at a restaurant (no fast food)
Hotel rates
Drinks and snacks to take away (fast food)
Transportation: public transportation, vehicle costs, vehicle fuel, vehicle insurance and vehicle maintenance
Installment sale / Car lease
Petrol / Diesel
Public transport
maintenance service
ties
car insurance
vehicle purchase
ANYCALCULATOR
To calculate an accurate cost of living index for a specific person, basket items that are not relevant to the person must be excluded from the calculation.
these categories of basket are excluded from the calculation of the cost of living index.
So
This increases the accuracy of the cost of living index
and allows each individual to have their own personalized
cost of living index based on their specific arrangements
The formula to calculate the specific index of the cost of living for an international assignment is as follows:
Cost of Living Index = Index of Adjusted Cost of Living of Host City / Index of Adjusted Cost of Living of Residence
Example 1) An Australian worker moving from Perth to London where the employer will provide medical care and communications
Most expensive in London:
to Mumbai, where the employer will provide him with housing and education
Most expensive in Bombay:
Health: General health, medical and medical insurance
Cost of consultation with general practitioners
and
Daily allowance for private rooms in the hospital
over-the-counter medicines
and
Private health insurance/medical assistance quotes
So that
Housing: housing, water, electricity, gas, household fuels, local rates and housing taxes
Mortgage / Apartment
House/apartment rental
electricity consumption
Local Ownership Fees/Taxes/Encumbrances
Domestic help
dry cleaning
Linen
Office supplies
Newspapers and magazines
seals
Personal care: personal care products and services
Cosmetic Products
like,
hair care
Moisturizer / Sunscreen
diapers
painkillers tablets
toilet paper
Toothpaste
Soap / Shampoo / Conditioner
recreation and culture
Books
movie camera
ticket
Sporting goods
theater ticket
Restaurants, eating out and hotels
Business dinner
Dinner at a restaurant (no fast food)
hotel rates
Drinks and snacks to take away (fast food)
ButTransportation: public transportation, vehicle costs, vehicle fuel, vehicle insurance and vehicle maintenance
Installment Sales / Car Rental
Petrol / Diesel
Public transport
maintenance service
ties
car insurance
Vehicle purchase
Each category in the basket does not
change and is weighted in the final
but
calculation based on the spending pattern of espects
The formula for calculating the specific index of the cost of living for an international assignment is as follows:
Cost of Living Index = Index of Adjusted Cost of Living of Host City / Index of Adjusted Cost of Living
Examples of cost of living index calculations using our data:
An Australian worker moving from Perth to London where the employer will provide healthcare and communications
Most expensive in London:
Example 2) A British worker who moves from London to Mumbai, where the employer will provide him with housing and education.
Most expensive in Bombay:
in the host place the same basket of goods and services So that he could buy in his country of origin. The basis for calculating a COLA is the Cost of Living Index (COLI), which indexes the cost of the same package of goods and services in different geographic locations. It is a simple and accurate method of measuring the purchasing power of fluctuating wages and ensuring parity.
So
cost of living index
The Xpatulator Index measures the costs of 230 products and services in 13 different basket groups in 950 cities around the world. The data is collected by a team of research analysts who study comparable articles that are available internationally. A minimum of 3 prices for the same product brand/size/volume are used to determine the average price of each item in each location. Items are priced quarterly and tend to rise and fall with inflation. The 13 different basket categories are as follows:
Alcohol and Tobacco: Alcoholic Beverages and Tobacco Products
Clothing: Clothing and shoe products
Communication
Education
Furniture and Appliances: Furniture, Household Items and Appliances
Groceries: food, non-alcoholic drinks and cleaning products
7. Health: general health, medical and medical insurance
Housing: water, electricity, home gas, home fuels, local rates and housing taxes
Miscellaneous: Stationery, Linen, and General Goods and Services
Personal Care:like Products and Services
Recreation and culture
Restaurants, Eating Out and Hotels
13. Transportation: public transportation, vehicle costs, vehicle fuel, vehicle insurance and vehicle maintenance
To calculate an accurate index for a specific person, items in the basket that are not relevant to the person must be excluded from the calculation.
of COLA calculations with our data
An Australian worker with a net disposable salary of AUD$100,000 relocating from Perth to London where the employer will provide healthcare and communications.
($100,000.00 X 1.2806 X 1 X 0.4768) min ($100,000.00 X 0.4768) = COLA of 13,379.44 (GBP)
So that
Based on all the above factors, a person would need a living allowance of 13,379.44 (GBP). This cost of living allowance compensates for the total cost of living difference of +28.06% and the relative difference in hardship of 0%.
A British worker with a net disposable salary of 18,000 who moves from London to Mumbai,
like
where the employer will provide him with shelter and education.
(18,000.00 X 1 X 1.3 X 67,2852) min (18,000.00 X 67,2852) = COLA of 363,340.32 Indian Rupees
Like as
Based on all the above factors, a person would require a living allowance of INR 363,340.32 on top of his current salary of GBP 18,000.00,But in compensation for his relocation from London to Mumbai. This COLA compensates for the total cost difference of [-30.53%] and the relative difficulty difference of 30%.
COLA payment
The COLA is paid as a salary supplement (ie as an additional allowance) after deduction of taxes in the host country.
So that
exchange rate fluctuations
Significant changes in the exchange rate can make a significant difference in the COLA calculation.
The COLI reflects changes caused by inflation and exchange rates. In the short term there may
Using an independent service provider provides an independent and objective basis for determining an employee’s COLA.
