In this guide
Quick answer: new pay = current pay × (1 + raise percentage ÷ 100). To check the real value of a raise, divide (1 + raise) by (1 + inflation) and subtract 1.
Working out the raise
A 5% raise on a $50,000 salary adds 50,000 × 0.05 = $2,500, for a new salary of $52,500. To find the percentage from two amounts, subtract the old pay from the new pay and divide by the old pay. Going from $20 to $21.50 an hour is (21.50 − 20) ÷ 20 = 7.5%. The raise calculator does both.
Why inflation matters
Prices rise over time, so a raise that is smaller than inflation means you can buy less than before, even though your pay went up. The real change in buying power is (1 + raise) ÷ (1 + inflation) − 1.
Real raise table
The table shows the approximate change in buying power for different raises against different inflation rates.
| Raise ↓ / Inflation → | 2% | 3% | 4% | 5% |
|---|---|---|---|---|
| 2% | +0.0% | -1.0% | -1.9% | -2.9% |
| 3% | +1.0% | +0.0% | -1.0% | -1.9% |
| 4% | +2.0% | +1.0% | +0.0% | -1.0% |
| 5% | +2.9% | +1.9% | +1.0% | +0.0% |
| 7% | +4.9% | +3.9% | +2.9% | +1.9% |
For example, a 4% raise when prices rise 3% leaves you about 1% better off. A 3% raise when prices rise 5% leaves you about 1.9% worse off.
Use the inflation rate that matches you
Official inflation figures are averages. Your own costs may rise faster or slower depending on where you live and what you spend on, such as rent, food or fuel. Look up the most recent figure from an official statistics agency before making a comparison.
Look at the whole package
Base pay is only one part of compensation. Bonuses, retirement matching, health insurance, paid leave and remote work all have value. When comparing offers, convert them all into the same basis. The hourly to salary guide shows how to compare hourly and yearly pay.
Asking for a raise
Come with numbers: your responsibilities, what similar roles pay in your area, and the raise percentage that would restore your buying power. A specific figure is easier to discuss than a general request.
Try the calculators
- Salary Raise Calculator: New pay and percentage raise
- Hourly to Salary Calculator: Convert hourly, weekly or yearly pay
- Percentage Calculator: Percent of, what percent, percent change
General information only, not professional advice. See our editorial policy.