The 2025 cost of living adjustment (COLA) for federal employees is a pay raise that is designed to offset the rising cost of living. The COLA is calculated based on the change in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from September of the previous year to September of the current year. The COLA is then applied to the basic pay of federal employees.
The COLA is important because it helps to ensure that federal employees are able to keep up with the rising cost of living. Without the COLA, federal employees would see their purchasing power decrease over time. The COLA also helps to attract and retain qualified employees in the federal workforce.
