The federal cost-of-living adjustment (COLA) for 2025 is a measure of the change in the cost of living for federal employees and retirees. It is used to adjust their salaries and benefits to keep pace with inflation.
The COLA is calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The CPI-W measures the change in prices for a basket of goods and services purchased by urban wage earners and clerical workers. The COLA is equal to the percentage change in the CPI-W from December of the previous year to December of the current year.