To calculate a raise percentage, subtract your old pay from your new pay, divide by your old pay, and multiply by 100. Going from $65,000 to $68,000 is a 4.62% raise. Enter any one of percentage, amount, or new salary below and the calculator fills in the other two, plus the after-tax change:
The Three Raise Formulas
Every raise question is one of three directions. All of them use your old pay as the base.
| You know | You want | Formula |
|---|---|---|
| Old pay and new pay | Raise percentage | (New − Old) ÷ Old × 100 |
| Old pay and raise % | New pay | Old × (1 + Raise % ÷ 100) |
| Old pay and raise % | Raise amount | Old × Raise % ÷ 100 |
Example 1 — raise percentage from an offer letter
Old salary $65,000, new salary $68,000:
- Raise amount: $68,000 − $65,000 = $3,000
- Raise percentage: $3,000 ÷ $65,000 × 100 = 4.62%
Example 2 — new salary from a percentage
A 3.5% raise on $60,000:
- New salary: $60,000 × 1.035 = $62,100
- Raise amount: $2,100 per year
Always divide by the old pay, not the new pay. Dividing $3,000 by $68,000 gives 4.41%, which understates the raise.
Why a Cut and a Raise Don't Cancel Out
Because each percentage is taken from a different base, a 10% pay cut followed by a 10% raise leaves you at 99% of where you started: $1,000 → $900 → $990. To get back from $900 to $1,000 you would need an 11.1% raise.
Hourly, Monthly, and Annual Raises
The raise percentage is the same no matter which pay period you use, as long as your hours don't change. The dollar amounts scale with the number of pay periods:
| Pay period | Periods per year |
|---|---|
| Annual | 1 |
| Monthly | 12 |
| Bi-weekly | 26 |
| Weekly | 52 |
| Hourly (full-time) | 2,080 hours |
Example — hourly raise
A raise from $25.00 to $26.50 an hour:
- Raise percentage: $1.50 ÷ $25.00 × 100 = 6%
- Annual raise at 2,080 hours: $1.50 × 2,080 = $3,120
Example — monthly raise
A 4% raise on a $2,500 monthly salary is $100 more per month, or $1,200 per year. If your employer pays a 13th-month salary or a bonus calculated as a multiple of base pay, the raise usually lifts those too, so the yearly gain can be larger than 12 × the monthly raise. Check how your bonus is defined.
Why You Keep Less Than the Full Raise
A raise is taxed at your marginal rate — the rate on your last dollars of income — not your average rate. Under the calculator's U.S. assumptions (2026 federal brackets, single filer, FICA, no state tax):
| Current salary | Raise | Gross raise | Take-home raise | Share taxed |
|---|---|---|---|---|
| $60,000 | 10% | $6,000 | $4,821 | 19.65% |
| $60,000 | 3.5% | $2,100 | $1,687 | 19.65% |
| $100,000 | 5% | $5,000 | $3,518 | 29.65% |
At $60,000, each extra dollar falls in the 12% federal bracket plus 7.65% FICA, so about 19.65% of the raise goes to tax. At $100,000 the extra dollars fall in the 22% bracket, so about 29.65% goes to tax. State and local taxes, where they apply, take a further share. For the full breakdown of what comes out of a paycheck, see how to calculate take-home pay.
Tax brackets alone can't make a raise lower your take-home pay. Moving into a higher bracket only raises the tax on the dollars inside that bracket. In the $60,000 example, the average tax rate goes from 16.02% to 16.35%, while take-home pay still rises by $4,821. Means-tested benefits with hard income cutoffs are a separate issue and can occasionally reduce your net gain.
Outside the U.S.: switch the calculator to Custom Rate. It applies one flat rate to both salaries. If you only want to know how much of the raise you keep, enter your marginal rate (your top income tax bracket plus social contributions on that income). Your overall average rate will understate the tax on the raise in most progressive systems.
Real Raise: Adjusting for Inflation
A raise only increases what you can buy if it beats inflation. The exact formula is:
Real raise = (1 + raise %) ÷ (1 + inflation %) − 1
With an illustrative 3% inflation rate:
| Nominal raise | Real raise |
|---|---|
| 2% | −0.97% |
| 3.5% | +0.49% |
| 5% | +1.94% |
A quick approximation is raise minus inflation (3.5% − 3% ≈ 0.5%), which is close enough for small numbers. Use the inflation figure for your own country and the same 12-month period as your raise.
What Counts as a Good Raise?
There is no universal number. Recent benchmarks, which measure different things and are not directly comparable, give a sense of the range:
- United States: Mercer's survey of U.S. employers projected average 2026 merit increases of 3.2% and total salary increase budgets of 3.5% (HR Dive, Dec. 2025).
- Japan: Rengo's final 2026 spring wage tally was 5.01% including regular seniority increases; the base-up portion alone was 3.50% (Rengo, July 2026, Japanese).
- Taiwan: Average regular monthly earnings rose 3.09% in 2025 while consumer prices rose 1.66%, according to DGBAS figures (Economic Daily News, Chinese).
These are averages and budgets, not a promise for any individual. Your own raise depends on performance, industry, role, and local labor market. Promotions and job changes often come with larger increases than annual merit raises, but the size varies widely.
How Raises Compound Over Time
Each raise is applied to the pay that already includes last year's raise, so small differences grow. Starting from $60,000 (pre-tax, nominal, illustrative):
| Annual raise | After 1 year | After 5 years | After 10 years |
|---|---|---|---|
| 3% | $61,800 | $69,556 | $80,635 |
| 3.5% | $62,100 | $71,261 | $84,636 |
| 5% | $63,000 | $76,577 | $97,734 |
The gap between 3% and 5% a year is $1,200 after one year but about $17,100 after ten. That is why negotiating the base salary tends to matter more than a one-time bonus of the same size. The bonus is paid once, while a higher base carries into every later raise.
Common Mistakes
- Dividing by the new salary. The base is always the old pay.
- Mixing percent and percentage points. A raise that goes from 3% last year to 4% this year is 1 percentage point higher, not 1% higher.
- Comparing different pay periods. Convert both numbers to the same period (annual is easiest) before comparing offers.
- Using your average tax rate for the raise. The raise is taxed at your marginal rate, which is usually higher.
- Ignoring hours. If a new hourly job gives you fewer hours, a higher hourly rate can still mean lower annual pay.
Key Takeaways
- Raise % = (New − Old) ÷ Old × 100; new pay = Old × (1 + Raise %).
- The percentage is the same across hourly, monthly, and annual pay if your hours don't change.
- You keep your raise minus your marginal tax rate; moving into a higher bracket doesn't lower your total take-home pay.
- Subtract inflation to see your real raise.
- Raises compound, so a higher base salary is worth more over time than a one-time bonus of the same amount.