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Office of Allowances

 SPECIAL NOTICE FOR POST ALLOWANCE (COLA) CHANGES

EFFECTIVE OCTOBER 11, 2020 WITH TL:SR 1005

The majority of the Post Allowance (COLA) changes effective 10/11/2020 are the result of a revised COLA process that was an outcome of a GAO and Congressional inquiry, and a 2017 OIG recommendation that the Department develop an objective method of generating COLA rates.

The major change in the process from the prior method is with respect to collection of market data.  Rather than task posts with collecting the data, the Departmentís contractor now obtains it for 210 locations, including Washington, D.C. suburbs, from Mercer, AirInc, and ECA International.  These three companies provide similar support to major U.S. multinational enterprises with worldwide presence.  The contractor then used a uniform methodology, adjusting for costs of housing and utilities since these are provided by USG agencies for their employees assigned to foreign posts, to calculate an index that assigned a base score of 100 to the Washington, D.C. suburbs and compared other locations to that base.  The rate for each post is based on how the post index compares to the base index.

The data for the foreign postís expat basket of goods and services is compared to that of the Washington, D.C. suburbs.  The contractor will provide updated index information to the Department of Stateís Office of Allowances every August.  New COLA rates based on that data will be implemented in the first full pay period of each Fiscal Year.  Post indexes will be reviewed on a biweekly basis for exchange rate fluctuations and post allowances will be adjusted when necessary.  Posts determined to have hyperinflation will be adjusted biannually.  More information about how COLA levels are determined is available in DSSR 228.

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Post Allowance: Commonly referred to as the "cost-of-living" allowance, this is an allowance based on a percentage of "spendable income," i.e. money you can really put your hands on to spend on goods and services. The amount varies depending on salary level and family size. The post allowance is calculated by comparing costs for goods and services at the foreign post with the costs for the same items in the Washington, D.C. area.  Categories of goods and services are:  food (consumed at home or in restaurants), tobacco/alcohol, clothing, personal care, household and operations, medical, recreation, POV and public transportation.

A post allowance is established when the overall cost of goods and services at a foreign post, taking into account expenditure patterns, is at least 3% above the cost of the same goods and services in the Washington, D.C. area.


MORE INFORMATION:

COLA Calculator
*Calculate the amount of COLA annually and biweekly

LINKS:

Post (Cost of Living) Allowance Rates

Allowances by Location
 

Post Allowance Category Weights

QUESTIONS:

FAQ 
- Post (Cost of Living) Allowance

Post Allowance -
 Diplopedia (Intranet ONLY)

Foreign Service Assignment Notebook

For Standardized Regulation interpretation:
 AllowancesO@state.gov