How to use the pay raise calculator
- Pick what you know. Most offers arrive as a percentage (“a 4% merit increase”). Some arrive as a dollar figure (“an extra $1.50 an hour”). If you already have the new number, choose the old-and-new option to get the percentage.
- Choose how your pay is quoted. Hourly, weekly, every two weeks, twice a month, monthly or yearly. Enter the amount the same way your pay stub or offer letter shows it. For hourly pay, add your usual hours per week so the yearly figure is right.
- Enter inflation. The default is a placeholder. For a current figure, look up the latest 12-month change in the Consumer Price Index from the Bureau of Labor Statistics and type it in.
- Optional: years of raises. Set how many years you expect a similar raise to see where the same percentage takes you.
The results show the raise both ways, as a percentage and as dollars per year and per month, because the two can feel very different. A 3% raise on $40,000 is $1,200 a year, or $100 a month before tax.
Pay raise formulas
Raise % = (new pay − old pay) ÷ old pay × 100
Yearly pay = hourly rate × hours per week × 52
Real raise = (1 + raise %) ÷ (1 + inflation %) − 1
Worked example: percentage to dollars. A $50,000 salary with a 4% raise becomes $50,000 × 1.04 = $52,000. The raise is $2,000 a year, about $166.67 a month, or $76.92 per paycheck if you are paid every two weeks ($2,000 ÷ 26).
Worked example: dollars to percentage. Going from $20.00 to $21.50 an hour is a $1.50 raise. Divide by the old rate: $1.50 ÷ $20.00 = 0.075, a 7.5% raise. At 40 hours a week that adds $1.50 × 40 × 52 = $3,120 a year.
Divide by the old pay, not the new one. Dividing $1.50 by the new $21.50 gives 7.0%, which understates the raise. That small slip is the most common error when people work out a raise by hand.
Converting between hourly, paycheck and yearly pay
Raises are easier to compare once everything is on the same basis. The calculator converts with these counts:
| Pay schedule | Paychecks per year | $60,000 a year is |
|---|---|---|
| Weekly | 52 | $1,153.85 |
| Every two weeks (biweekly) | 26 | $2,307.69 |
| Twice a month (semimonthly) | 24 | $2,500.00 |
| Monthly | 12 | $5,000.00 |
| Hourly, 40 hours a week | 2,080 hours | $28.85 |
Biweekly and semimonthly are easy to mix up. Biweekly means every other Friday, 26 checks; semimonthly means the 15th and the last day of the month, 24 checks. The yearly total is the same, but each semimonthly check is larger.
The 2,080-hour year (40 × 52) is the usual private-sector convention. The federal government divides a yearly salary by 2,087 hours instead, the average number of paid hours per year over a 28-year calendar cycle, as described by the Office of Personnel Management. The difference is small: $60,000 ÷ 2,087 = $28.75 an hour instead of $28.85.
Your raise after inflation
A raise buys more only if it is bigger than the rise in prices over the same period. The Bureau of Labor Statistics measures this every month in its Real Earnings release, which adjusts average earnings by the Consumer Price Index for All Urban Consumers (CPI-U).
The calculator uses the same idea. With a 4% raise and 3% inflation, the real raise is 1.04 ÷ 1.03 − 1 = 0.97%, a little under the simple difference of one point. With a 3% raise and 3% inflation, the real raise is zero: you earn more dollars, but they buy what your old pay bought.
If your raise is below inflation, the real result is negative. That is worth knowing before a pay conversation, because “a raise” and “a pay cut in real terms” can be the same number. Use the 12-month CPI change that ends closest to your raise date; the BLS publishes it each month.
How raises add up over several years
Raises compound: each year’s percentage applies to the pay that already includes last year’s raise. A $50,000 salary with a 3% raise every year reaches $50,000 × 1.035 = $57,963.70 after five raises, not $57,500. The extra $463.70 is the raise on earlier raises.
The same math works backward. If your pay went from $50,000 to $57,963.70 over five years, your average yearly raise was (57,963.70 ÷ 50,000)1/5 − 1 = 3%. Averaging the five percentages gives a slightly different, less accurate answer when the raises varied.
Two other things matter over time. A one-time bonus or lump-sum increase does not raise your base, so it does not compound into later years. And a promotion raise usually changes the base you will receive future percentages on, which is why a bigger step now can be worth more than a series of small annual increases.
Using the numbers in a raise conversation
Before a review, run three scenarios: the raise you expect, the raise that keeps pace with inflation, and the raise you plan to ask for. Seeing each one as monthly dollars makes the gap concrete. For many people, the difference between 3% and 5% on a $55,000 salary is $1,100 a year, or about $92 a month before tax.
If you are comparing a raise with a new job offer, convert both to the same basis first, including hours. A $30 hourly job at 37.5 hours a week pays $58,500 a year; a $60,000 salaried job with regular 45-hour weeks pays less per hour worked. Benefits such as retirement matching and health insurance are part of total pay but are outside this calculator, so list them separately.
Everything here is gross pay. Your take-home change will be smaller after taxes and deductions; your payroll department or your next pay stub will show the exact amount.
Sources & assumptions
How this calculator gets its numbers. Full method: our methodology.
- New pay = current pay × (1 + raise %); raise % = (new − old) ÷ old × 100.
- Pay periods per year: weekly 52, every two weeks 26, twice a month 24, monthly 12. Hourly pay × hours per week × 52 gives yearly pay.
- Real raise = (1 + raise) ÷ (1 + inflation) − 1, using the inflation figure you enter.
- The projection repeats the same percentage raise each year, compounding.
- All amounts are gross, before taxes, benefits and deductions.
Sources
- U.S. Bureau of Labor Statistics, Real Earnings (news release). Real earnings are nominal earnings adjusted by the Consumer Price Index for All Urban Consumers (CPI-U); the monthly release reports the 12-month change.
- U.S. Bureau of Labor Statistics, Consumer Price Index. Where to find the latest 12-month CPI-U change to enter as inflation.
- U.S. Office of Personnel Management, Computing Hourly Rates of Pay Using the 2,087-Hour Divisor. Federal hourly pay is the annual rate divided by 2,087 hours, rounded to the nearest cent; biweekly pay is the hourly rate × 80. Shown here as the alternative to the common 2,080-hour year.
Last reviewed . Pay raise figures are estimates; your offer letter or pay stub has the exact amounts.
Frequently asked questions
How do I calculate a raise percentage?
Subtract your old pay from your new pay, divide by your old pay and multiply by 100. Going from $48,000 to $50,400 is a $2,400 raise, and $2,400 ÷ $48,000 = 0.05, so the raise is 5%.
How much is a 3% raise on $20 an hour?
Multiply $20 by 1.03 to get $20.60 an hour. The raise is 60 cents an hour, which is $24 a week or $1,248 a year at 40 hours a week, before tax.
What is a 5% raise on a $60,000 salary?
A 5% raise adds $3,000 a year, bringing the salary to $63,000. That is $250 more per month, or about $115.38 more per paycheck if you are paid every two weeks.
Does my raise keep up with inflation?
Compare it with the 12-month change in the Consumer Price Index from the Bureau of Labor Statistics. If your raise is larger, your pay buys more than before; if it is smaller, your real pay fell. The real raise is (1 + raise) ÷ (1 + inflation) − 1.
Why does my paycheck go up by less than the raise?
The raise is calculated on gross pay. Federal and state income tax, Social Security, Medicare and any percentage-based deductions such as retirement contributions also rise with your pay, so the net change on your check is smaller than the gross raise.
How do I turn an hourly raise into a yearly amount?
Multiply the raise per hour by your hours per week and by 52. A $1.25 raise at 40 hours a week is $1.25 × 40 × 52 = $2,600 a year. If you work fewer weeks, use your actual paid weeks instead of 52.