Calculate your raise percentage, new salary, extra monthly take-home, and see how your raise stacks up against inflation.
How to Calculate a Pay Raise Percentage
Calculating your raise percentage is straightforward — you need your old salary and your new salary. The formula compares the increase to your starting point.
Raise % = ((New Salary − Old Salary) ÷ Old Salary) × 100
Example: ($68,000 − $65,000) ÷ $65,000 × 100 = 4.6% raise
To go the other direction — calculating your new salary from a raise percentage:
New Salary = Old Salary × (1 + Raise % ÷ 100)
Example: $65,000 × 1.03 = $66,950 (3% raise)
What Is a Good Pay Raise Percentage?
Context matters a lot here. A raise below the inflation rate is effectively a pay cut — your purchasing power decreases even though the dollar number goes up. Here are useful benchmarks:
| Raise % | Context | Real outcome at 3% inflation |
|---|
| 0–1% | Cost of living adjustment (minimal) | Pay cut in real terms |
| 2–3% | Average annual raise (2024 US average: ~3.9%) | Roughly flat in real terms |
| 4–6% | Strong raise / good performance | Modest real increase |
| 7–10% | Promotion or significant role change | Meaningful real raise |
| 10%+ | Job change / large promotion | Strong real increase |
Average Pay Raise in 2024–2025
According to the Bureau of Labor Statistics and major compensation surveys, the average U.S. salary increase in 2024 was approximately 3.9%. With inflation running at around 2.5–3.5%, that translates to a real wage gain of roughly 0.5–1.5% for most workers. A raise above 5% in the current environment represents a genuine increase in purchasing power.
How to Negotiate a Bigger Raise
- Time it right — Ask during performance review season or after a major win, not randomly mid-year.
- Come with data — Know your market rate using sites like Glassdoor, Levels.fyi, or LinkedIn Salary. If you're underpaid relative to market, that's your strongest argument.
- Quantify your impact — "I increased sales by 18%" is much stronger than "I worked hard this year."
- Ask for a specific number — Vague requests get vague answers. Say "I'm looking for a 7% increase to bring me to $X."
- Consider total compensation — If the base salary is fixed, negotiate on bonus, equity, extra PTO, or remote work flexibility.
Raise vs Job Change
Research consistently shows that switching jobs typically results in a 10–20% salary increase, compared to 3–5% for staying put. If you've received below-inflation raises for multiple years, a job change may be the most effective way to reset your compensation to market rate. Use this calculator to understand the gap between where you are and where you'd like to be.
Frequently Asked Questions
How much of my raise will I actually take home?
Your take-home increase depends on your marginal tax rate — the rate applied to your last dollar of income. Use the tax rate slider in the calculator to adjust for your situation. At a 22% marginal rate, a $2,000 raise nets roughly $1,560 per year ($130/month). At 32%, the same raise nets about $1,360 ($113/month).
Is a 3% raise good?
It depends on inflation. At 3% inflation, a 3% raise keeps your purchasing power exactly flat — you're not gaining anything in real terms. In 2024, with inflation around 3%, the average raise of 3.9% represented only a modest real increase. To genuinely improve your financial position, aim for a raise that beats inflation by at least 1–2 percentage points.
How do I calculate a raise if I'm paid hourly?
The same percentage formula applies. If you earn $20/hour and get a 5% raise: $20 × 1.05 = $21/hour. To convert to annual: multiply your hourly rate by 2,080 (40 hours × 52 weeks). So $21/hour × 2,080 = $43,680/year.
What's the difference between a raise and a cost of living adjustment?
A cost of living adjustment (COLA) is designed to keep your purchasing power the same by matching inflation — it's not a real raise. A merit raise or promotion raise is above and beyond COLA and represents actual real-terms compensation growth. Many employers give COLA and call it a raise, which is technically accurate but misleading.
How often should I get a raise?
Most employers do annual reviews with salary adjustments once per year. If you haven't received a raise in 2+ years, you've likely fallen behind both inflation and market rate. It's reasonable to ask for a review after 12–18 months in a role, especially if your responsibilities have grown.