Salary Raise Calculator

How it works

The calculator answers three questions about a raise, one per tab.

Raise %. You know your salary and the raise in percent. The new salary and the raise amount are:

raise amount = salary × raise % / 100
new salary = salary + raise amount

Two salaries. You know the old and the new salary and want the percentage:

raise % = (new salary − old salary) / old salary × 100

A lower new salary is shown as a reduction, with a negative percentage.

After inflation. You know the raise and how much prices rose over the same period. The real raise measures the change in buying power:

real raise % = (1 + raise %) / (1 + inflation %) − 1
new salary in the old prices = new salary / (1 + inflation %)
raise needed to keep pace = salary × inflation %

All amounts are handled as whole cents internally, not decimals. Percentages are applied to the nearest 0.01% and amounts are rounded to the nearest cent (a tie rounds up). The raise amount is always the new salary minus the old one, so the figures add up to the cent. Whether you enter gross or net pay, the calculator works the same way. Just use the same kind of figure throughout.

A few limits follow from this. The raise and inflation fields accept 0% to 1,000%, so a pay cut is entered in the "Two salaries" tab (with the lower figure as the new salary), not as a negative raise, and the after-inflation tab does not model falling prices. The "Two salaries" tab needs a current salary above zero, because a percentage of nothing is undefined.

Rounding is easiest to see with an odd percentage. A raise of 7.456% is applied as 7.46%, so on a salary of 30,000 the tool adds 30,000 × 0.0746 = 2,238.00, not the 2,236.80 the unrounded figure would give. If you need the exact amount, use the "Two salaries" tab with the real new salary.

The real raise, by hand

The after-inflation tab is a division, not a subtraction. Take a salary of 50,000, a raise of 8% and inflation of 12% over the same year:

new salary = 50,000 × 1.08 = 54,000   (raise 4,000)
real raise = 1.08 / 1.12 − 1 = −3.57%
new salary in the old prices = 54,000 / 1.12 = 48,214.29
raise needed to keep pace = 50,000 × 0.12 = 6,000

Subtracting 12 from 8 would give −4 points, which is close but not the same. The gap grows with the numbers: for a 25% raise against 40% inflation, subtraction gives −15, while the real figure is −10.7%. Dividing is correct because prices and pay both compound on the same starting point.

Several raises in a row

Raises multiply. The tool handles one raise at a time, so for a sequence, feed each result into the next: a salary of 40,000 with raises of 5%, 8% and 6% over three years becomes

40,000 × 1.05 = 42,000
42,000 × 1.08 = 45,360
45,360 × 1.06 = 48,081.60

The total raise is 8,081.60. Entering 40,000 and 48,081.60 in the "Two salaries" tab gives 20.2%, compared with the 19% you would get by adding 5, 8 and 6.

Gross, net and tax brackets

The tool does no tax math, so it cannot tell you what a raise does to your take-home pay. In a system with progressive tax, part of a raise may be taxed at a higher rate than the rest of your pay, and some systems also phase out benefits or allowances as income rises. The net raise is then a smaller percentage than the gross one. With made-up payslip figures: if gross goes from 40,000 to 44,000 (10%) and net goes from 30,000 to 32,700, the net raise is 2,700 / 30,000 = 9%. Take the real numbers from your payslips and enter the two net salaries in the "Two salaries" tab. For the rules that apply to you, check your employer or the tax authority.

Examples

A new salary. A salary of 30,000 with a 25% raise becomes 30,000 × 1.25 = 37,500. The raise is 7,500.

The percentage. Going from 30,000 to 36,000 is a 6,000 raise, or 20%. Going from 30,000 to 27,000 is a cut of 3,000, or −10%.

After inflation, behind. A 25% raise while prices rise 40%: the real raise is −10.7%. The new salary of 37,500 buys what 26,785.71 bought before. To merely keep pace you would have needed a raise of 12,000.

After inflation, ahead. A 10% raise while prices rise 5%: the real raise is 4.8%. The new salary is worth 1.048 times the old one in the old prices.

Compounding. Two raises of 10% in a row take 100 to 110 and then to 121, a total of 21%.

Things to watch for

• A headline raise can be a pay cut. If inflation is higher than your raise, you are poorer even though the number went up. The after-inflation tab shows this clearly.
• Raises multiply, they do not add. Two 10% raises are 21%, not 20%. The gap grows with larger percentages and more years.
• Gross and net move differently. Progressive taxes and contributions usually take a larger share of a higher pay, so a 10% gross raise gives a smaller net raise. Enter net figures if net is what you care about.
• Percentage points are not percent. Going from a 5% raise to a 7% raise is two percentage points, or a 40% bigger raise. Be careful when comparing offers described in either way.
• Check the period of inflation. The inflation figure must cover the same months as the raise. Annual inflation against a raise given over six months gives a misleading real raise.
• Compare the raise with your own costs too. Published inflation figures are usually averages over a basket of goods, and the tool uses whatever number you give it. If your rent or commute rose more than average, your personal real raise is lower than the tool shows.
• One-off bonuses are not raises. A bonus does not change your base pay, so do not enter it as a raise percentage.
• Everything runs in your browser. The amounts you enter are not sent to a server.

To work with any percentage in general, use the percentage calculator, and to see how an amount grows over the years, the compound interest calculator.