Transparent method
The formula
Worked example
Example inputs
How to interpret the result
A raise's gross percentage and its actual net take-home increase are two different numbers, because the raise pushes some income through tax brackets and payroll tax calculations that don't simply mirror the gross percentage. The net increase that actually shows up in a paycheck typically runs somewhat below the announced gross percentage.
Before you rely on it
What to check
Start from the gross change the raise represents, then separately estimate the net effect through your own actual tax situation, rather than assuming the two percentages match.
The common error
Where people go wrong with pay raise calculator
Expecting a take-home pay increase that exactly matches the announced gross raise percentage. Taxes and payroll deductions apply to the larger gross figure, so the net increase that actually lands in each paycheck typically runs somewhat lower.
Sensitivity evidence
How raise percentage changes the new annual pay
| Raise percentage | New annual pay | Monthly increase |
|---|---|---|
| 3.0% | $66,950 | $163 |
| 4.0% | $67,600 | $217 |
| 5.0%worked example | $68,250 | $271 |
| 6.0% | $68,900 | $325 |
| 7.0% | $69,550 | $379 |
Every input, tested
Which input moves the new annual pay most
| Input | Tested from | To | New annual pay at each end | Swing |
|---|---|---|---|---|
| Current annual pay | $58,500 | $71,500 | $61,425 to $75,075 | $13,650 (20%) |
| Raise percentage | 4.0% | 6.0% | $67,600 to $68,900 | $1,300 (1.9%) |
Two variables at once
New annual pay by raise percentage and current annual pay
| Raise percentage \ Current annual pay | $52,000 | $65,000 | $78,000 |
|---|---|---|---|
| 3.0% | $53,560 | $66,950 | $80,340 |
| 4.0% | $54,080 | $67,600 | $81,120 |
| 5.0% | $54,600 | $68,250 | $81,900 |
| 6.0% | $55,120 | $68,900 | $82,680 |
| 7.0% | $55,640 | $69,550 | $83,460 |
Step by step
The worked example, input by input
| Input | Value used |
|---|---|
| Current annual pay | $65,000 |
| Raise percentage | 5.0% |
| New annual pay | $68,250 |
| Monthly increase | $271 |
Where the inputs come from
Current annual pay is your salary before deductions, and raise percentage is the increase you have been offered or expect. For a raise stated in dollars, divide by the current pay to get the percentage. Use gross figures on both sides. If you get a raise in hourly wage, multiply by your annual hours to convert it.
When the result stops applying
The calculation is before tax. A raise may change withholding, benefits contributions or eligibility for credits. Cost of living changes can erase a raise, and a raise from a new job may be bigger than staying. The percentage is measured on base pay and does not include bonuses or benefits.
What to compare it with
See how much of a raise you keep on the take-home pay calculator, and whether it beats inflation on the real wage calculator. The salary-to-hourly page converts pay to an hourly rate, and the percentage change calculator computes raises between two figures. The inflation calculator shows price growth.
People also ask
Frequently asked questions
What is a typical annual raise?
Merit increases commonly range from about 3% to 5% a year, with larger jumps for promotions or job changes. Cost-of-living adjustments differ by employer.
Does a raise push me into a higher tax bracket and reduce my pay?
No. Only the income above the bracket threshold is taxed at the higher rate, so a raise always increases take-home pay.
How do I know if a raise beats inflation?
Compare the raise percentage with the inflation rate. The difference is roughly your real gain in buying power.