Pay Raise Calculator

What a pay raise calculator helps you figure out

A pay raise can look simple on paper (“you’re getting 10%”), but real life usually comes with details: your pay might be hourly, the offer might be monthly, your bonus might be separate, and the number you care about might be “how much more do I actually take home each month?” A pay raise calculator turns those moving pieces into a clear comparison so you can understand what’s changing and by how much.

This calculator focuses on three practical questions: How much more is the new pay? What percentage increase is it? And what does it look like across time (monthly, annual, per paycheck)? It also includes an optional “real raise” view so you can estimate how much of your increase is keeping up with inflation versus improving purchasing power.

Key terms: current pay, new pay, raise amount, and raise percentage

To keep comparisons consistent, it helps to separate a raise into two pieces:

• Raise amount is the difference between the new pay and current pay.
• Raise percentage is the raise amount divided by the current pay (your baseline), expressed as a percent.

If you only remember one rule, make it this: the baseline matters. A raise is measured from your current pay, not from the new pay. That’s why the same difference can produce different percentages depending on which number you divide by.

The basic formula for a raise percentage

When you know your current pay and new pay (for the same pay period), the percent increase is:

Example: if your current annual salary is 60,000 and your new salary is 66,000, the raise amount is 6,000 and the raise percentage is 6,000 ÷ 60,000 = 0.10 → 10%.

How to calculate a new salary from a raise percentage

Sometimes the offer is expressed as a percent (“we’re increasing your salary by 7%”). In that case, the new pay is:

Example: 60,000 with a 7% raise becomes 60,000 × 1.07 = 64,200.

Why pay period conversions matter

Many pay mistakes come from comparing values that use different time periods. For example, comparing a monthly value to an annual value without converting makes the increase look wildly wrong. This is why the calculator includes a pay period selector and annualized cards.

Common pay periods

• Annual: total pay across a year.
• Monthly: useful for budgeting and rent/loan planning.
• Weekly / biweekly: common payroll schedules.
• Daily: sometimes used for contractors or day rates.
• Hourly: common for part-time, shift, or hourly roles.

Hourly pay: the two inputs that change everything

Hourly conversion depends on your schedule. Two people can have the same hourly rate but different annual pay if one works 35 hours a week and another works 45. That’s why this tool asks for hours per week and weeks per year. Using 52 weeks is typical, but you can adjust it if you want to exclude unpaid weeks.

Comparing base pay versus total compensation

HR often talks about “compensation,” which can include base pay plus bonuses, allowances, and benefits. Your raise could be applied only to base pay, while other parts of compensation change separately. To keep your calculations meaningful:

• Use base pay when you want to measure your ongoing raise.
• Include bonus when you want first-year impact or total earnings comparison.
• Consider allowances (transport, housing) separately if they can change or expire.

The “From Raise %” tab lets you add an optional one-time bonus, so you can see the difference between a permanent pay increase and a single payment.

After-tax change: a helpful estimate (not a tax calculation)

A raise is usually discussed in gross terms, but many people experience it as net pay. If you want a quick estimate, you can enter a tax/deduction percentage to see an approximate after-tax change. This is not a full tax engine; it’s a simple “apply a rate” view so you can compare gross and net change side by side.

When you use an estimated rate, the most useful outcome is often the monthly after-tax difference: it helps you decide what the raise means for savings, debt payoff, or lifestyle planning.

Real raise: what inflation does to your purchasing power

If inflation rises faster than your pay, you might feel like you’re running in place even with a nominal raise. That’s why economists separate:

• Nominal raise: the raise shown in currency terms.
• Real raise: the raise after adjusting for inflation (a proxy for purchasing power change).

A widely used approximation is:

Example: a 10% raise with 3% inflation gives (1.10 ÷ 1.03) − 1 ≈ 6.8% real raise. If inflation is 10% and your raise is 10%, the real raise is roughly 0%. The “Real Raise” tab shows this estimate plus an inflation-adjusted view of your new pay.

How to use each tab in this pay raise calculator

1) Compare Pay: current vs new

Use this tab when you already know your current pay and the new pay being offered. It’s the fastest way to compute both raise amount and raise percentage. It also shows annualized values so you can compare like-for-like even if your pay period is hourly or monthly.

2) From Raise %: calculate new pay

Use this tab when you know the raise percent and want to see the updated pay. It’s useful for planning scenarios (“What if I get 6%?”) and for understanding how a percent raise translates into monthly or yearly value.

3) Target Raise: find the percentage you’d need

Use this tab when you have a goal: a target salary, a target hourly rate, or a specific raise amount you want to reach. The calculator returns the required raise percentage and the annualized difference, which is helpful for negotiations and planning. The optional max raise percentage can show whether your target fits within a limit (for example, a policy cap).

4) Real Raise: adjust for inflation

Use this tab when you want a reality check on purchasing power. Enter an inflation estimate for the same time frame (usually the next year). You’ll see a nominal raise percent and an estimated real raise percent. This can help you compare offers across years or consider how much of a raise is “keeping up.”

Practical examples you can copy

Example A: salary raise from 72,000 to 78,480

Raise amount = 78,480 − 72,000 = 6,480. Raise % = 6,480 ÷ 72,000 × 100 = 9%. Monthly gross change ≈ 6,480 ÷ 12 = 540.

Example B: hourly rate from 20.00 to 22.50 at 40 hours/week

Hourly raise = 2.50. Raise % = 2.50 ÷ 20.00 × 100 = 12.5%. Annualized change ≈ 2.50 × 40 × 52 = 5,200.

Example C: you want your monthly pay to increase by 500

If your current monthly pay is 6,000 and you want +500, the required raise % is 500 ÷ 6,000 × 100 = 8.33%. The Target tab can calculate this directly.

Common mistakes when calculating raises

• Comparing different pay periods (monthly vs annual) without converting.
• Using the new pay as the baseline for percent increase instead of current pay.
• Mixing base salary with total compensation and expecting the same percentage.
• Rounding too early, especially when converting hourly to annual or comparing close offers.
• Ignoring schedule assumptions for hourly roles (hours/week and weeks/year).

How to interpret a raise beyond the headline percent

Look at monthly impact

A raise might sound big as an annual number, but what changes your day-to-day decisions is often the monthly difference. That’s why the calculator highlights monthly equivalents.

Separate permanent vs one-time money

A one-time bonus can make the first year look great, but it doesn’t compound into future years the way base pay does. If you’re comparing offers, it can help to look at both: “ongoing annual base change” and “first-year total change.”

Consider real purchasing power

A 5% raise in a low-inflation year can feel stronger than a 10% raise in a high-inflation year. The real raise view is a simple way to add context without turning the calculation into a complicated forecast.

Frequently asked pay raise questions (quick answers)

Is a raise always the same as a promotion?

Not necessarily. A promotion often comes with a raise, but raises can also happen due to annual adjustments, market alignment, retention, or performance reviews without a title change.

How should I handle overtime or variable hours?

For variable schedules, use your best average hours/week. If overtime is common, you can also run two scenarios—one with base hours and one with typical overtime—to understand the range.

What about allowances and benefits?

Allowances can be a major part of monthly income in some regions. If an allowance is guaranteed and ongoing, include it in the pay number you compare. If it’s temporary or policy-driven, consider comparing base pay separately to avoid overstating the long-term raise.