Cost of Living Adjustment 2020 Calculator

Use this Cost of Living Adjustment 2020 Calculator to determine how much your salary or benefits should increase to account for inflation in 2020. This tool helps you understand the official COLA percentage and apply it to your compensation.

What is Cost of Living Adjustment (COLA)?

Cost of Living Adjustment (COLA) is an increase in wages or benefits designed to offset the effects of inflation. It's typically applied to government salaries, military pay, and some private-sector contracts. The COLA percentage is determined by the Consumer Price Index (CPI) for urban wage earners and clerical workers.

Key Points

COLA is based on the CPI-W, which measures price changes for urban wage earners and clerical workers
It's not the same as general inflation rates
COLA percentages vary each year based on inflation data

Types of COLA

There are several types of COLA adjustments:

Government COLA: Applied to federal employees' salaries
Military COLA: Adjusts military pay based on inflation
Private-sector COLA: Some companies offer COLA to employees

How to Calculate COLA

The basic formula for calculating COLA is:

COLA Formula

New Amount = Original Amount × (1 + COLA Percentage)

For example, if your original salary was $50,000 and the COLA percentage was 2.5%, your new salary would be:

Example Calculation

$50,000 × (1 + 0.025) = $51,250

Steps to Calculate COLA

Determine your original amount (salary, benefit, etc.)
Find the COLA percentage for 2020
Convert the percentage to a decimal (divide by 100)
Add 1 to the decimal
Multiply the original amount by this new number

Use our calculator above to perform these calculations quickly and accurately.

COLA vs. Inflation

While COLA and inflation are related, they're not the same thing. Here's how they differ:

Aspect	COLA	Inflation
Definition	Specific increase in wages/benefits	General increase in prices
Calculation	Based on CPI-W	Based on CPI-U
Application	Government, military, some private	All prices and wages
Frequency	Annual	Continuous

The 2020 COLA percentage was 1.6% for federal employees, which was lower than the general inflation rate of 1.4% for the same period.

Example Calculation

Let's walk through a complete example using the 2020 COLA percentage of 1.6%.

Scenario

Original salary: $60,000
COLA percentage: 1.6%

Step-by-Step Calculation

Convert percentage to decimal: 1.6% = 0.016
Add 1 to the decimal: 1 + 0.016 = 1.016
Multiply original salary by this factor: $60,000 × 1.016 = $60,960

Result

With a 1.6% COLA, your salary would increase from $60,000 to $60,960 in 2020.

Note

This calculation assumes the COLA applies to your entire salary. Some adjustments might apply to only certain portions of your compensation.

Frequently Asked Questions

What was the 2020 COLA percentage?: The 2020 COLA percentage for federal employees was 1.6%. This was based on the CPI-W calculation for urban wage earners and clerical workers.
How often is COLA applied?: COLA is typically applied annually, usually in January of each year, based on the previous year's inflation data.
Is COLA the same as inflation?: No, COLA is specifically designed to adjust wages and benefits to account for inflation, while general inflation measures price increases across all goods and services.
Who receives COLA?: COLA is primarily applied to federal employees, military personnel, and some private-sector employees with government-style contracts.
How is the COLA percentage determined?: The COLA percentage is calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which measures price changes specifically for these groups.