How to calculate a pay raise
Three formulas cover every way a raise gets described:
- From a percentage: new pay = current pay × (1 + raise % ÷ 100)
- From an amount: new pay = current pay + raise amount
- Percentage from a new salary: raise % = (new pay - current pay) ÷ current pay × 100
Worked example: you earn $60,000 a year and get 5 percent. $60,000 × 1.05 = $63,000, which is $3,000 more a year.
The maths is the same in any currency. A move from ₹8,00,000 to ₹8,60,000 is 60,000 ÷ 8,00,000 × 100, or 7.5 percent.
How to convert pay between hour, week, month and year
The calculator turns everything into a yearly figure first: hourly pay × hours per week × 52, weekly pay × 52, or monthly pay × 12. It then divides back out. Here is $63,000 on a 40-hour week:
| Period | Pay |
|---|---|
| Year | $63,000.00 |
| Month | $5,250.00 |
| Two weeks | $2,423.08 |
| Week | $1,211.54 |
| Hour | $30.29 |
Two traps catch people. A month is not four weeks, because 52 ÷ 12 is about 4.33. So $1,000 a week is about $4,333 a month, not $4,000. And hours matter: the same $63,000 on a 48-hour week works out at $25.24 an hour. To compare hourly and salaried jobs in more detail, use the hourly to salary calculator.
What is a real raise after inflation?
A real raise measures what your extra money can actually buy.
Real raise % = ((1 + raise % ÷ 100) ÷ (1 + inflation % ÷ 100) - 1) × 100
With a 5 percent raise and 3 percent inflation, 1.05 ÷ 1.03 = 1.0194, so your real raise is 1.94 percent. Subtracting gives you 2, which is close, but the gap grows as the numbers rise. A 25 percent raise with 20 percent inflation is 4.17 percent, not 5.
Your new pay in today's money is $63,000 ÷ 1.03 = $61,165. So the $3,000 raise buys about $1,165 more than last year's salary did.
A raise below inflation means your buying power fell. With a 2 percent raise and 4 percent inflation, the result is -1.92 percent.
For the rate, use the latest annual figure from your national statistics office: BLS in the US, ONS in the UK, MoSPI in India or PBS in Pakistan. These are national averages, so your own costs may rise faster or slower.
How to use these numbers when you ask for a raise
Run the calculator three times: once for the amount you expect, once for the amount you want, and once for the amount that only keeps you level. At 3 percent inflation, staying level on $60,000 takes $61,800.
Inflation alone makes a weak case, because it affects everyone. Lead with what you have added, and use market pay as support. You could say:
"Since my last review I have taken over the Northern accounts and trained two new hires. Similar roles are advertised at $64,000 to $70,000. I would like to discuss moving to $66,000."
Check real listings on open jobs for that middle sentence, and use only figures you can show. How much of a raise to ask for goes deeper on choosing the number.