SALARY
A pay raise quoted as a percentage can be hard to picture. This calculator turns your raise into real numbers: your new salary, and how much extra you get per year, per month, per paycheck and per hour.
Pay raise calculator
Results are estimates for educational purposes only and are not financial advice. The hourly rate assumes 2,080 working hours per year (40 hours a week for 52 weeks). Monthly pay is the annual salary divided by 12 and biweekly pay is the annual salary divided by 26, before tax and other deductions.
Say you earn $65,000 a year and you get a 4% raise.
The raise is worth $2,600 a year, taking your new salary to $67,600. Split into smaller periods, that is $5,633.33 a month, which is $216.67 more than before, and $2,600.00 per biweekly paycheck, which is $100.00 more each time.
On an hourly basis, using 2,080 working hours a year, your pay rises from $31.25 to $32.50 an hour, an increase of $1.25 an hour. Small figures like that are easy to shrug off in a review meeting, but they apply to every hour you work from then on, and they lift the base that your next raise is worked out from. The Consumer Financial Protection Bureau offers free budgeting worksheets and money management guides.
The raise percentage applies directly to your current salary. If you earn $60,000 and get a 5% raise, the calculator multiplies $60,000 by 5% to give a $3,000 raise, then adds it to your salary to give a new salary of $63,000. It then splits the new salary into monthly, biweekly and hourly amounts, and shows how much each one has gone up.
Small percentages still matter more than they first look, because raises compound over a career. Each future raise is worked out from your new, higher salary rather than your old one, so this raise lifts every pay rise that follows it too. A modest raise early in your career can therefore be worth far more than its first-year value suggests.
A raise also lifts the percentage-based extras that are linked to your salary. If your employer matches a percentage of what you pay into a 401(k), a higher salary usually means a bigger match, and a bonus worked out as a percentage of salary grows too. That is why it is worth looking at the full effect of a raise, not just the new headline salary.
Multiply your current salary by the raise percentage, then add the result to your current salary. For example, 5% of $60,000 is $3,000, so a 5% raise takes your salary to $63,000. The calculator above does the sums for you and breaks the answer down by year, month, paycheck and hour.
Typical annual raises run at about 3% to 5%, which is often enough to keep pace with the rising cost of living, plus a little extra. Bigger jumps usually come with a promotion or a change of job, where raises of 10% to 20% are common. If your pay has fallen behind the market rate for your role, you may have a case for more.
No. Tax brackets apply only to the part of your income that falls inside them, so if a raise moves you into a higher bracket, only the amount above the threshold is taxed at the higher rate. The rest is taxed exactly as before, which means a raise always leaves you with more take-home pay, never less.
Far more than the first year suggests. Every raise lifts the base from which all your future raises are worked out, and it lifts percentage-based benefits too, such as employer retirement contributions and bonuses. A raise won early in your career can keep compounding for decades, which is why even a small percentage is well worth asking for.