How to calculate a pay raise
A raise given as a percentage multiplies your current pay by 1 plus the percentage as a decimal. A 5% raise on 60,000.00 a year gives 60,000.00 × 1.05 = 63,000.00, which is 3,000.00 more. A raise given as an amount is simpler: add it to your pay. A 3,000.00 yearly raise on the same salary also reaches 63,000.00, and it works out to 5.00%. The calculator works in both directions, so you can start from the percentage your employer offered or from the amount on the letter.
Find the raise percentage between two salaries
If you know the old and new pay, subtract the old from the new, divide by the old and multiply by 100. Moving from 60,000.00 to 63,000.00 is 5.00%. The same formula handles a pay cut: 60,000.00 down to 57,000.00 is -5.00%, a difference of 3,000.00 a year. Negative raises are accepted in every mode, as long as the new pay does not fall below zero. If the current pay is zero, the percentage is not defined, because there is nothing to measure the change against, and the calculator shows only the amount.
Annual, monthly, biweekly, semimonthly, weekly and hourly pay
Pay is quoted in different periods, so the calculator converts everything through the yearly amount. Weekly pay is the yearly pay divided by 52, biweekly by 26, semimonthly by 24 and monthly by 12. For 63,000.00 a year that is 1,211.54 a week, 2,423.08 every two weeks, 2,625.00 twice a month and 5,250.00 a month. Biweekly and semimonthly are easy to confuse. Biweekly pays every two weeks, which is 26 paychecks, while semimonthly pays twice a month, which is 24. The same yearly pay therefore gives a smaller biweekly paycheck than a semimonthly one: 2,423.08 compared with 2,625.00.
Hourly pay needs two more facts, the hours you work each week and the number of weeks you are paid. At 40 hours for 52 weeks, an hourly rate of 30.00 is 62,400.00 a year, and a 5% raise lifts it to 31.50 an hour or 65,520.00 a year. If you work 37.5 hours, or are paid for 50 weeks, enter those figures, because they change the conversion between the hourly rate and the yearly total. They do not change the other periods.
What the raise means per paycheck
A raise looks different in each pay period, and the paycheck is often the figure people feel. The 3,000.00 yearly raise in the example is 115.38 more on each biweekly paycheck, 125.00 on each semimonthly one and 250.00 a month. These are gross amounts, before tax and deductions. The calculator does not estimate tax or take-home pay, because those depend on where you live and on your own circumstances.
Does your raise keep up with inflation?
A raise buys less if prices rise as fast. To compare them, divide one plus the raise by one plus inflation. With a 5% raise and 3% inflation, 1.05 ÷ 1.03 − 1 = 1.94% in buying-power terms. Put another way, 60,000.00 would need to grow to 61,800.00 to hold its buying power, and the new pay of 63,000.00 is 1,200.00 above that. A 2% raise at 4% inflation is a real cut of 1.92%, even though the number on the payslip went up. The inflation figure is your own assumption for the same period as the raise. It is not a forecast, and it ignores tax and changes in what you spend.
Worked example
| Pay period | Before | After | Change |
|---|---|---|---|
| hourly | 28.85 | 30.29 | 1.44 |
| weekly | 1,153.85 | 1,211.54 | 57.69 |
| biweekly | 2,307.69 | 2,423.08 | 115.38 |
| semimonthly | 2,500.00 | 2,625.00 | 125.00 |
| monthly | 5,000.00 | 5,250.00 | 250.00 |
| annual | 60,000.00 | 63,000.00 | 3,000.00 |
Before you negotiate or accept
The percentage and the amount tell you how large an increase is, not whether it is fair. Compare it with your own cost of living, with pay for similar roles and with any change in hours, benefits or responsibilities. If you are weighing two offers rather than a raise, the salary calculator compares gross pay from two jobs side by side. To turn any two numbers into a percentage change, the percentage calculator shows the steps. And to see what a higher income does to your plans, put the new monthly amount into the budget calculator. This page is a general calculator, not financial or employment advice.
Pay raise questions
How do I calculate a 5% raise?
Multiply your pay by 1.05. On 60,000.00 that is 63,000.00, a raise of 3,000.00.
How do I find my raise percentage from two salaries?
Subtract the old salary from the new one, divide by the old salary and multiply by 100. Use the Old and new pay option and it does the steps for you.
How much is my raise per paycheck?
Divide the yearly raise by the number of paychecks in a year. A 3,000.00 raise is 115.38 per biweekly paycheck (26 a year) or 125.00 per semimonthly paycheck (24 a year).
What is the difference between biweekly and semimonthly pay?
Biweekly pay arrives every two weeks, so there are 26 paychecks a year, and in some months you get three. Semimonthly pay arrives twice a month, so there are 24 paychecks a year, each one a little larger.
Does the calculator include tax?
No. Every figure is gross pay before tax, deductions and benefits. Take-home pay depends on your tax situation, which this calculator does not estimate.
Is a 3% raise really a raise if inflation is 3%?
In buying-power terms it is roughly flat. Enter the inflation rate you expect and the calculator shows the real raise, which is slightly different from the simple gap between the two percentages.