Pay Raise Calculator

A pay raise calculator uses two formulas. New pay = current pay × (1 + raise ÷ 100), and raise % = (new pay − old pay) ÷ old pay × 100. For example, a 4% raise on a $60,000 salary gives $60,000 × 1.04 = $62,400, which is $2,400 more a year, $200 a month or about $1.15 an hour for a 40-hour week.

How to use the pay raise calculator

1. Pick a tab. New pay works forward from a raise in percent or dollars. Raise % works backward from your old and new pay. Several raises stacks raises over the years.
2. Enter your current pay and choose the period: per hour, week, two weeks, half-month, month or year. Enter your hours a week so hourly and yearly pay can be linked.
3. Enter the raise, the new pay or the list of raises. Leave the inflation rate in place, replace it with your own, or clear it.
4. Read the answer, the raise per year, month, paycheck and hour, and the after-inflation figure. Open Show steps for the working and the table for every pay period.

Pay raise formula: from a percent to new pay

New pay = current pay × (1 + r), where r is the raise written as a decimal (4% = 0.04).

The raise in dollars is current pay × r. A 4% raise on $60,000 is $60,000 × 0.04 = $2,400 a year. Split over a year, that is $2,400 ÷ 12 = $200 a month, $2,400 ÷ 26 = $92.31 every two weeks, and $2,400 ÷ 2,080 hours = $1.15 an hour (40 hours × 52 weeks = 2,080 hours).

The same formula works for hourly pay. A 5% raise on $22 an hour gives $22 × 1.05 = $23.10 an hour. At 40 hours a week, that $1.10 is worth $1.10 × 2,080 = $2,288 a year.

How to calculate your raise percentage

Raise % = (new pay − old pay) ÷ old pay × 100

Always divide by the old pay. If your hourly rate goes from $20 to $21.50, the change is $1.50, and $1.50 ÷ $20 = 0.075, a 7.5% raise. Dividing by the new pay ($1.50 ÷ $21.50 ≈ 6.98%) is a common mistake that makes a raise look smaller than it is. This is the same percent change formula used for prices and test scores; the percent change calculator covers it in general.

Compare pay for the same period. If one figure is hourly and the other is yearly, convert first: yearly pay = hourly rate × hours a week × 52. The hourly to salary calculator does this conversion with overtime and unpaid time off.

What common raises are worth

The table shows what each raise adds on a $50,000 salary and on a $20 hourly wage.

These are gross amounts. Taxes and deductions come out of the raise too, so the change in your paycheck will be smaller. The paycheck calculator estimates take-home pay.

Pay raise after inflation

A raise only adds buying power if it is larger than inflation over the same period. The exact formula for the real raise is:

Real raise = (1 + raise) ÷ (1 + inflation) − 1

The U.S. Bureau of Labor Statistics reported that the Consumer Price Index for All Urban Consumers (CPI-U) rose 3.7% over the 12 months ending September 2026. With that rate:

• A 4% raise: 1.04 ÷ 1.037 − 1 = 0.29% real raise. You are slightly ahead.
• A 2% raise: 1.02 ÷ 1.037 − 1 = −1.64%. Your pay buys about 1.64% less than before, even though the number went up.

The quick shortcut, raise minus inflation (4% − 3.7% = 0.3%), is close when both rates are small, but the division is the correct method. To keep up exactly, your raise must equal the inflation rate. The inflation calculator uses the BLS CPI series to compare dollars across years.

Several raises: why they compound

Each raise is a percent of your pay after the previous raises, so you multiply the growth factors instead of adding the percents:

Final pay = starting pay × (1 + r₁) × (1 + r₂) × … × (1 + rₙ)

Worked example. A $60,000 salary gets raises of 3%, 4%, 3.5% and 5%:

1. $60,000 × 1.03 = $61,800
2. $61,800 × 1.04 = $64,272
3. $64,272 × 1.035 = $66,521.52
4. $66,521.52 × 1.05 = $69,847.60

The total increase is $69,847.60 ÷ $60,000 − 1 = 16.41%, not the 15.5% you get by adding the raises. The average raise is the compound rate (1.164127)^1/4 − 1 ≈ 3.87% a raise, not the simple average of 3.875%. Compounding works against you too: a 10% pay cut followed by a 10% raise takes $1,000 to $900 and then to $990, not back to $1,000.

Common mistakes with raise calculations

• Dividing by the new pay when finding the raise percent. Use the old pay.
• Mixing periods, such as a monthly raise on an hourly rate. Convert both to the same period first.
• Adding raises over several years instead of multiplying the factors.
• Ignoring inflation. A raise below the inflation rate is a cut in buying power.
• Expecting the whole raise in your paycheck. The raise is gross; taxes take part of it.

Results are estimates for planning and learning, not financial or tax advice.

Sources

Checked November 2026:

• U.S. Bureau of Labor Statistics: Consumer Price Index (CPI-U 12-month change, September 2026, released October 14, 2026)

Pay raise practice quiz: 10 questions

Test yourself with 10 multiple-choice questions. Choose an answer and press Submit to see if you are right and why. Your score appears at the end.

Frequently asked questions

How do I calculate a 3% raise?

Multiply your pay by 1.03. On $45,000 a year, the new salary is $45,000 × 1.03 = $46,350, a raise of $1,350 a year. On $18 an hour, the new rate is $18 × 1.03 = $18.54.

What percent raise did I get?

Subtract your old pay from your new pay, divide by the old pay and multiply by 100. Going from $52,000 to $54,600 is $2,600 ÷ $52,000 = 5%.

Is a 3% raise good?

It depends on inflation. With prices up 3.7% over the year to September 2026, a 3% raise is about 1.03 ÷ 1.037 − 1 = −0.68% in buying power. Use the inflation rate for your own raise period to judge it.

How much is a $1 an hour raise per year?

At 40 hours a week for 52 weeks, $1 × 2,080 = $2,080 a year before taxes. At 30 hours a week it is $1 × 1,560 = $1,560.

How much raise do I need to keep up with inflation?

A raise equal to the inflation rate keeps your buying power the same. To gain 2% in real terms when inflation is 3.7%, you need 1.02 × 1.037 − 1 = 5.774%, about 5.77%.

Related calculators

• Hourly to salary calculator
• Paycheck calculator
• Percent change calculator
• Inflation calculator
• Compound interest calculator