The cost of living indices can be expressed as cost of living allowances (COLA) and converted to local currency.

They show the difference between the host and home country spendable income which takes into account the cost of living differences between the home base and host country.

Caution should be taken when separately presenting the COLA in the expatriate's pay package because he may naturally expect the COLA to reflect local inflation and increase accordingly at salary reviews. However, this is not necessarily the case, since the COLA takes into account the difference between home and host country inflation and exchange rate movements