What is cost-of-living allowance in SAP PA-GE - Management of Global Employees?

SAP Term: cost-of-living allowance

• Component: PA-GE

• Component Name: Management of Global Employees

• Description: Allowance that expatriates and employees on extended business trips receive to compensate for the higher cost of living in the host country compared to the home country.

Smart SAP Assistant

• Key Concepts: 
  Cost-of-living allowance (COLA) is a type of compensation offered by employers to employees who are assigned to work in locations with higher living costs than their home country. It is a component of the SAP PA-GE Management of Global Employees module, which helps employers manage the compensation and benefits of their global workforce. 
  
  How to use it: 
  The SAP PA-GE module allows employers to set up COLA for their global employees. Employers can define the COLA rate for each employee based on the cost of living in the employee’s assigned location. The module also allows employers to track and manage COLA payments, as well as other compensation and benefits for their global workforce. 
  
  Tips & Tricks: 
  When setting up COLA for global employees, it is important to ensure that the COLA rate is accurate and up-to-date. Employers should also consider other factors such as taxes, exchange rates, and inflation when calculating COLA rates. 
  
  Related Information: 
  The SAP PA-GE module also includes other components such as housing allowance, mobility allowance, and tax equalization. Employers should consider these components when setting up compensation and benefits for their global workforce.