Yes, you are right. Salaries are calculated in two ways. One is called the Local Net approach. and the other is build up approach.

I just answered your query of COLA.

Now coming to your below query. When some body is moving from Low Cost to High Cost Country eg. India to UK, then the salary is calculated on Local Net Approach, which means , he would be paid equivalent to local terms. where COLA / TP ( Territorial Premium ) is not given.

However when some one is moving on a Build up approach due to high salaries in the home country and if the COLA index is more than 100 , then he would be eligible to receive a COLA percentage.

A cost-of-living allowance (COLA) adjusts salaries based on changes in a cost-of-living index. Salaries are typically adjusted annually. They may also be tied to a cost-of-living index that varies by geographic location if the employee moves

Employees who are being permanently relocated are less likely to receive such allowances, but may receive a base salary adjustment to reflect local market conditions.

A cost-of-living allowance (COLA) adjusts salaries based on changes in a cost-of-living index. Salaries are typically adjusted annually.


Hope this clarifies

Sahana