Salary Increase Calculator
A raise is not a raise until inflation is counted.
Salary Increase Calculator
New salary = current × (1 + raise%); real change = (1 + raise%) ÷ (1 + inflation%) − 1
Calculated instantly
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What This Calculator Does
The Salary Increase Calculator shows what a raise does to your annual and monthly pay, and what it is worth after inflation. It separates the nominal increase — the number on the contract — from the real increase in purchasing power.
How It Works
The new salary is the current salary multiplied by one plus the raise percentage. The annual raise is the difference, and dividing by twelve gives the monthly change. The real increase divides the raise factor by the inflation factor, because prices are rising at the same time as pay.
Example
A $50,000 salary with a 5% raise becomes $52,500, a $2,500 annual raise or about $208 a month. If inflation is 2.5%, the real increase is only about 2.44%, and the new salary buys what $51,220 bought before the raise.
Formula
new = current × (1 + raise%)monthly = (new − current) ÷ 12real% = ((1 + raise%) ÷ (1 + inflation%) − 1) × 100new ÷ (1 + inflation%)Reading the Results
New salary
The nominal salary after the raise. It is the figure that appears on the contract and the one payroll will use.
Real increase after inflation
The change in what the salary can actually buy. A positive number means the raise beat inflation; a negative number means it did not.
Sources and References
US Bureau of Labor Statistics — Real Earnings
Nominal and inflation-adjusted wage changes
The standard method for deflating nominal pay by the consumer price index.
US Bureau of Labor Statistics — CPI Inflation Calculator
Purchasing power of the dollar over time
A public check on the inflation adjustment used here.
OECD — Average annual wages
Cross-country wage comparison methodology
Context for comparing a nominal raise with real earnings growth.
References identify the method or data behind this calculator. Where a standard or tariff changes, the current edition applies, and the assumptions stated above take precedence over a remembered figure.
Frequently Asked Questions
Is a 5% raise good?
It depends on inflation and your market. A 5% raise with 2.5% inflation is a real gain of about 2.4%; the same raise with 6% inflation is a real cut. Compare it with both the cost of living and what similar roles pay.
Why is the real increase not just raise minus inflation?
Because the two percentages apply to different bases. Dividing the factors is the exact way to combine them. For small rates the difference is tiny, but it grows as the numbers get larger.
Should I count a bonus as a raise?
No. A bonus is usually one-off and does not compound, while a base salary increase raises future pay, pension contributions, and often overtime. The calculator is for a change to base salary.
What if my raise is below inflation?
Your nominal pay rises but your purchasing power falls. That is still useful information for a negotiation: the real value of the role, and the market rate for it, are stronger arguments than the inflation figure alone.