Level-numbers are used to describe the hierarchical organization of a record. Level-numbers that describe this hierarchy range from 01 through 49.

The topmost data item is the record. It always has a level-number of 01. Items that are included in the record have greater (although not necessarily consecutive) level-numbers.

All items subordinate to a group item must have level-numbers greater than the group's level-number. The end of a group item is delimited by the next data description entry that has a level-number less than or equal to the group's level-number.

Four special level-numbers are used to specify special types of data. They are never used in a hierarchical structure. Instead, they define the following special types:

The following example shows how level-numbers define a record's hierarchy and shows how records, groups, and elementary items interact. The items are indented to display the hierarchy. This is a recommended programming practice but is not required by COBOL.

01  EMPLOYEE-RECORD.                    (record)
    03  EMPLOYEE-KEY.                   (group)
        05  DEPARTMENT-CODE             (elementary)
        05  EMPLOYEE-NUMBER             (elementary)
    03  EMPLOYEE-IDENTIFICATION.        (group)
        05  EMPLOYEE-NAME               (elementary)
        05  EMPLOYEE-ADDRESS.           (group)
            07  STREET-ADDRESS-1        (elementary)
            07  STREET-ADDRESS-2        (elementary)
            07  CITY                    (elementary)
            07  STATE                   (elementary)
            07  ZIP-CODE                (elementary)
        05  EMPLOYEE-RACE               (elementary)
        05  MARRIAGE-STATUS             (elementary)
    03  PAYROLL-INFORMATION.            (group)
        05  SALARY                      (elementary)
        05  PAY-FREQUENCY               (elementary)
        05  DEDUCTION-CODE-1            (elementary)
        05  DEDUCTION-CODE-2            (elementary)
        05  SICK-ACCRUAL-RATE           (elementary)
        05  VACATION-ACCRUAL-RATE       (elementary)