How this salary increase calculator works
A raise is simple math — new salary = current salary × (1 + raise% / 100) — but it's easy to lose sight of what that percentage actually means in dollars. This calculator turns the percentage into your new salary, the extra amount per year, per month, and per paycheck, so the number means something concrete.
It also projects your raise forward: at a steady percentage every year, what does your salary look like in 5, 10, or 20 years? And it checks that raise against inflation, so "I got a raise" and "I got ahead" aren't treated as the same thing.
Why raise vs. inflation matters
A 3% raise sounds like progress, but if inflation also ran at 3%, your real purchasing power didn't move. Worse, a raise below inflation means you can afford less than you could before, even though your paycheck grew. This calculator always shows the real, inflation-adjusted comparison — never just the nominal raise number — and never frames a below-inflation raise as a failure, just as information worth knowing.
What the calculator assumes
Your raise percentage, projection horizon, and inflation rate are all editable inputs with sane defaults — this calculator never fetches a "live" CPI figure or assumes your employer's specific review cycle. Use your own numbers, or your actual offer letter, for the most accurate result.
Frequently asked questions
How do I calculate a salary increase?
Multiply your current salary by (1 + raise% / 100). A 5% raise on $60,000 is $60,000 × 1.05 = $63,000 — a $3,000 raise, or about $250 more a month. The math is identical whether your pay is an annual salary or an hourly wage.
Is a 3% raise good?
It depends on inflation. A 3% raise exactly matches 3% inflation — your purchasing power stays flat, not ahead. If inflation is running higher than your raise, you're effectively taking a pay cut in real terms even though the number on your paycheck went up. Compare your raise to your own inflation input above.
What's the difference between a raise and a promotion?
A raise is a percentage increase applied to your current pay. A promotion in this calculator is modeled as an EXTRA percentage bump layered on top of your regular raise in a specific year — reflecting a step-change in compensation (a new title, a market adjustment) rather than the routine annual increase.
Does a raise keep up with inflation?
Only if your raise percentage is at least as high as the inflation rate. The real (inflation-adjusted) value of a raise is ((1 + raise%) / (1 + inflation%) − 1) × 100 — a small positive number means you're ahead, near zero means you're treading water, and negative means you're losing purchasing power despite the raise.
How much is a 5% raise per month?
Divide the annual raise amount by 12. On a $60,000 salary, a 5% raise adds $3,000 a year, which is $250 a month — enter your own salary above for the exact figure.
Worked examples
Worked example 1
The immediate raise — $60k at 4%
$60,000 salary, 4% raise — the hub default, showing the immediate dollar impact.
New pay
$62,400
More per year
$2,400
A 4% raise on $60,000 brings you to $62,400 — $2,400 more a year, $200 more a month.
Worked example 2
The same raise, projected over 10 years
Same $60,000 salary and 4% raise, but compounded annually over a 10-year horizon.
Salary at year 10
$88,815
CAGR
4.00%
At a steady 4% every year, that same starting salary reaches $88,815 after 10 years — 48% total growth from compounding, not just the one-time raise.
Worked example 3
The same raise, checked against inflation
The 4% raise compared against 3% inflation — the real-terms read.
Real difference
+0.97%
Verdict
outpaces
Against 3% inflation, that same 4% raise outpaces inflation — about 0.97% ahead in real purchasing power, not just a bigger number on paper.
Salary after 10 years by starting salary and raise rate
Salary after 10 years by starting salary and raise rate
| Starting salary ↓ / Annual raise rate → | 2% | 4% | 6% | 8% |
|---|---|---|---|---|
| $40,000 | $48,760 | $59,210 | $71,634 | $86,357 |
| $60,000 | $73,140 | $88,815 | $107,451 | $129,535 |
| $80,000 | $97,520 | $118,420 | $143,268 | $172,714 |
| $100,000 | $121,899 | $148,024 | $179,085 | $215,892 |
Projected salary after a 10-year horizon at a steady annual raise rate, no promotions or inflation applied.
Every cell is computed live from lib/salary-growth.ts at render time — never hand-typed.
What affects the result
The raise percentage
The single biggest driver of both the immediate dollar impact and, compounded over years, the long-run salary trajectory.
Your starting salary
The same percentage raise is worth proportionally more in dollar terms at a higher starting salary — the percentage stays constant, the dollar amount scales.
The projection horizon
Compounding accelerates with time — a longer horizon at the same rate produces more than proportionally more total growth.
Inflation
Determines whether a raise represents real progress or just a bigger number — a raise below inflation is a real pay cut despite a nominal increase.
Promotions (step-changes)
A one-time promotion bump layered on top of routine raises can add more to a long-run salary than an extra point of annual raise rate — model this on the Promotion Raise Calculator.
Common mistakes to avoid
- ✗Treating the raise percentage as automatically meaning "ahead" — a raise below inflation is a real pay cut even though the paycheck number went up.
- ✗Comparing raise percentages across very different starting salaries without converting to dollars — 3% on $40,000 and 3% on $100,000 are the same percentage but very different real impact.
- ✗Assuming a steady-rate, multi-year projection is a guarantee rather than a planning baseline — real careers include dry years, step-changes, and job switches that a constant-rate line can't capture.
- ✗Rounding an hourly wage raise to the nearest whole dollar — a real $20.60/hr raise reads as a meaningless "$21/hr" at that precision.
- ✗Confusing an employer cost-of-living adjustment with the separate, federally published Social Security COLA — they are unrelated figures set by different entities.
Practical takeaways
- ✓Always check a raise against inflation, not just against last year's paycheck — "bigger number" and "ahead" are not the same claim.
- ✓Convert dollar-only raise figures to a percentage to compare fairly against typical bands (3–4% standard, 5%+ strong) or against other job offers.
- ✓For long-range planning, use a conservative raise-rate assumption rather than your best-case recent raise — the projection is only as realistic as the rate you feed it.
- ✓If a promotion is on the table, its timing matters — the same percentage bump earlier in your horizon compounds into more than the identical bump landing later.
- ✓Treat inflation as an editable assumption, not a fixed fact — use a rate that reflects your own situation rather than trusting a single national average.
Key terms
- Raise percentage
- The percent increase applied to current pay: new = current × (1 + raise% ÷ 100). Identical math whether pay is an annual salary or an hourly wage — only the unit and display precision differ.
- CAGR (compound annual growth rate)
- The smoothed, constant annual rate that would produce the same total growth over a period. When a raise rate is steady every year with no promotions, CAGR equals the raise percentage exactly — there is no lumpiness for the smoothing to average out.
- Real vs. nominal
- Nominal is the raw dollar figure on a paycheck; real is that figure adjusted for inflation, measured in constant (today's) purchasing power. A raise can be nominally positive while real (inflation-adjusted) purchasing power falls.
- Outpaces / keeps pace / trails
- The three-state read on a raise vs. inflation: outpaces means real purchasing power grew, keeps pace means it held flat (raise ≈ inflation, within a ±0.05% band), trails means it fell despite a nominally positive raise.
- COLA (cost-of-living adjustment)
- An employer-granted raise specifically intended to offset rising prices, as distinct from a merit or performance raise. Employer COLA percentages vary by company and are unrelated to the separate, federally published Social Security COLA.
- Promotion (step-change)
- In this calculator, an extra percentage bump applied in one specific year on top of that year's regular raise — reflecting a step-change in role or title, not a routine annual increase. It applies once, not as an ongoing additional rate.
- Keep-pace salary
- The future salary required, given a specific inflation rate and horizon, to hold today's purchasing power exactly flat — zero real gain, zero real loss. Falling short of this figure is a real decline in purchasing power even if the paycheck grew.
- Hourly, annualized
- An hourly raise expressed as a yearly dollar figure, using the standard full-time convention of 2,080 hours a year (40 hours × 52 weeks) — useful for comparing an hourly raise to a salaried offer or annual budget.
More questions answered
Does this calculator work for hourly wages, not just annual salary?
Yes — toggle to hourly mode and enter your rate instead of a salary. The underlying math is identical (new = current × (1 + raise% ÷ 100)); only the display precision changes, since hourly figures need cents, not whole dollars.
Does this calculator use a live or current inflation rate?
No. Inflation is a user-editable input with a dated, static default — this calculator never fetches a live CPI figure. Enter your own assumption, informed by your own situation, for the most relevant result.
Can I model a promotion, not just a routine raise?
Yes — the "Add a promotion" option under Inflation & promotions lets you layer an extra one-time percentage bump on top of your regular raise in a specific year, reflecting a step-change in role rather than a routine increase.
Model assumptions & disclosures
Gross pay only — not take-home pay. Every figure on this page is gross (pre-tax) salary or wage. This calculator never computes net pay, withholding, or take-home amounts — those depend on your tax bracket, filing status, benefits elections, and location, none of which are modeled here.
Inflation is your estimate, not live data. This calculator never fetches a current or official inflation figure. The inflation rate is a user-editable input with a dated, static default — enter your own assumption, informed by your own situation or a published figure you trust, for the most relevant result.
Multi-year projections are a planning baseline, not a guarantee. Projections assume a perfectly steady annual raise rate (plus any promotion you explicitly model). Real careers rarely move in a straight line — raises can pause, accelerate, or be interrupted by a job change. Treat projected figures as a reference point for planning, not a prediction of your actual future pay.
Employer cost-of-living adjustments are not the Social Security COLA. The Cost of Living Raise Calculator models an employer-granted percentage you enter yourself. It is unrelated to, and does not use, the separate federally published Social Security cost-of-living adjustment, which applies to benefit payments under a different program entirely.
Not financial or career advice. This calculator provides illustrative estimates based on the inputs you enter. It does not account for your complete financial picture, your specific employer's policies, or your individual circumstances. Consult your employer's HR team, a financial advisor, or a tax professional before making decisions based on these figures.