Sales
Pay Raise Calculator
Calculate the raise amount and new pay that a percentage increase produces, for an annual salary or an hourly rate.
Choose annual or hourly pay, then enter current pay and the raise percentage.
Enter your values
Gross salary before the raise.
The percentage increase applied to current pay.
Results
New annual salary
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Enter current salary and a raise percentage.
Raise amount
—
The increase per year.
Percentage increase
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The raise percentage entered.
Results are estimates based on the values entered and are provided for general planning.
Method
How to calculate pay raise
A percentage raise multiplies current gross pay by the raise rate to produce the increase, which is then added to current pay. Because the calculation is proportional, the same percentage produces a larger absolute increase on a larger base, which is why percentage raises widen pay gaps over time.
Formula
Raise amount = Current pay × Raise % ÷ 100 New pay = Current pay + Raise amount
Assumptions
- The raise percentage applies to gross pay before deductions.
- No income tax, payroll tax, benefits, or other deductions are calculated.
- Hourly figures are per hour; annual figures are per year. The arithmetic is identical.
- One-off bonuses, overtime, and shift differentials are excluded.
The raise amount is calculated at full precision before display. Currency displays two decimals; the percentage displays two decimals.
How to interpret the result
The new pay figure is gross — the amount before tax and deductions. Take-home pay will be lower, and the increase in take-home pay is usually smaller than the gross increase because part of the raise is taxed. Compare the raise percentage with inflation over the same period to judge whether real purchasing power improved.
Percentage raise versus flat increase
A flat increase adds the same amount to everyone. A percentage raise adds proportionally more to higher salaries: 5% is $2,000 on $40,000 and $6,000 on $120,000.
When comparing two offers, convert both to the same basis before deciding. A flat $2,500 increase on $45,000 is a 5.6% raise, larger in percentage terms than a 5% increase.
Frequently asked questions
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