Pay
Raise calculator
A raise that trails inflation is a pay cut in slow motion. This shows which one you got.
Two numbers decide whether a raise is good news: the percentage increase, and the inflation rate over the same period. If prices rose 3% and your pay rose 2%, your money buys less than it did, a raise on paper, a cut in practice. Enter your old and new pay to see both, plus the dollar change.
Enter your old and new salary, then Calculate.
Worked example, $60,000 to $65,000 against 3% inflation
That is a $5,000 raise, or 8.3%. To merely keep pace with 3% inflation, the salary would have needed to reach $61,800. It landed above that, so the raise beats inflation by $3,200 in real terms:
| Figure | Value |
|---|---|
| Dollar change | $5,000 |
| Percent change | 8.3% |
| Salary needed to match 3% inflation | $61,800 |
| Real gain above inflation | $3,200 |
Contrast a $1,000 raise on the same salary: 1.7%, which trails 3% inflation and leaves you $800 behind in buying power despite the bigger paycheck. That is the distinction the raw percentage hides.
Questions
How do I calculate my raise percentage?
Subtract your old pay from your new pay, divide by your old pay, and multiply by 100. A $60,000-to-$65,000 move is $5,000 ÷ $60,000 = 8.3%. The calculator also folds in bonuses on each side if you enter them.
Is a 3% raise good?
Only if inflation is below 3%. A 3% raise exactly matches 3% inflation, leaving your buying power flat. Above that inflation rate, a 3% raise is a real-terms cut. The "good raise" question is always a comparison to prices, not a fixed number.
What inflation rate should I use?
A common reference is the year-over-year change in the Consumer Price Index, published monthly by the Bureau of Labor Statistics. Use the most recent figure, or your own sense of how your costs have moved. The calculator lets you set the rate rather than assuming one.
Does a raise push me into a higher tax bracket and cost me money?
No, brackets are marginal. Only the portion of income above a threshold is taxed at the higher rate; the rest is unchanged. A raise never leaves you with less take-home. To see the take-home on new pay, use the paycheck calculator.
Should I count my bonus in the comparison?
Compare like with like. If both years include a bonus, enter both. A raise to base pay is more valuable than a one-off bonus of the same size because it compounds into future raises and benefits, a distinction worth keeping in view when an employer offers a bonus in place of a raise.
Related tools
- Bonus tax calculator a one-off bonus, after withholding
- Paycheck calculator take-home on the new salary
- Hourly to salary calculator compare two rates
Compares gross pay against an inflation rate you supply. Not investment or tax advice.