Salary Increase Calculator

Currency

Salary now

Salary after the raise

Inflation over the period, %

Income tax, %

Result

Raise

15%

Adjusted for inflation

6.48%

Difference a month

$15,000.00

Difference after tax

$13,050.00

Difference over a year

$180,000.00

Verdict

the raise outpaces inflation

This result is informational only and is not professional advice.

A raise below inflation is a pay cut

Calculates a pay rise as a percentage and shows what is left of it after inflation and income tax, monthly and over a year.

A raise is easy to feel good about and easy to misread. Fifteen percent sounds convincing until you set it against eight percent inflation, and what remains is about six and a half.

The real figure is not the difference between the two percentages but the ratio: the new salary divided by the old, divided by one plus inflation. That is the number that says whether your money buys more than it did.

What this calculator shows

The raise as a percentage and in money
The same raise after inflation, in real terms
The difference after tax, monthly and over a year

What to keep in mind

Both salaries are gross unless you enter net figures in both fields.
Inflation is the figure for the same period as the raise — a year, usually. Personal inflation depends on what you actually buy and often runs higher than the headline.

FAQs

Why is the real raise not fifteen minus eight?

Because percentages compound rather than add. The correct sum is 1.15 divided by 1.08, which comes to 1.0648 — 6.48 percent, not seven.

Which inflation figure should I use?

The official one for the period is the reasonable default. If most of your money goes on food and rent, your personal figure is probably higher.

What counts as a normal raise?

One that beats inflation. An indexation that merely matches it holds you still, which is why it is usually presented as generous.

Does a bonus count?

Not in this calculation. A bonus is a one-off; a raise changes the base every month afterwards, and the two are worth very different amounts over a year.

Worked example

From 100,000 to 115,000

Input: 100,000 now, 115,000 after, 8 percent inflation, 13 percent tax

Output: a 15 percent raise, 6.48 percent in real terms

Note: That is 15,000 more a month gross and 13,050 after tax, 180,000 over a year. Had inflation been fifteen percent, the same raise would have left you exactly where you started.

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Salary Increase Calculator

Result

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