Pay Raise Calculator

What Is the Pay Raise Calculator?

The Pay Raise Calculator is a free online tool that shows what a pay rise is really worth. Raises are often offered in one form, such as a percentage, while you think about money in another, such as your monthly budget or your hourly rate. This tool converts between them so you can see the change in every pay period at once.

It works in two directions. In Apply a raise mode, you enter your current pay and a raise, and the tool shows your new pay. In Find the % raise mode, you enter your old pay and your new pay, and the tool tells you the percent raise. In both modes you can add an inflation rate to see how much your buying power really changed.

What the Calculator Can Do

• Five pay periods. Enter your current pay as hourly, weekly, biweekly (every two weeks), monthly or yearly pay.
• Percent or fixed raise. Switch between a percent raise, such as 5 percent, and a fixed amount, such as 1.50 more per hour. A fixed amount is added per the pay period you selected for your current pay.
• Hours and weeks. Set hours per week (default 40) and weeks per year (default 52). Hours are used when converting to or from hourly pay and for the raise per hour figure, which is the yearly raise divided by hours per week x weeks per year.
• Side-by-side table. A table lists current pay, new pay and the difference for all five periods. The row for the period you entered is highlighted.
• Raise per year, month and hour. Three tiles show how much more you earn each year, each month and each hour worked.
• Percent raise. In raise mode the tool shows the percent change, which is useful when your raise was given as a fixed amount.
• Real raise after inflation. Enter an inflation rate to see how much your pay grew in real terms. Set inflation to 0 to hide it.
• Reverse mode. Enter old and new pay in the same period to get the percent raise and the amount of the raise.
• Eight currencies. USD, EUR, GBP, INR, BDT, CAD, AUD and JPY formatting. The currency only changes how numbers look.

Why It Is Useful

A raise of 5 percent sounds clear, but what does it mean for your rent, your weekly shopping or your hourly rate? Most people need to do several conversions in their head to answer that, and it is easy to make mistakes, for example by assuming a month is exactly 4 weeks. This calculator does all the conversions the same way every time.

It is also useful for comparing offers. One employer may offer a higher hourly rate, while another offers a higher yearly salary for more hours. Converting both to the same period makes the comparison fair. And when prices are rising, the real raise tells you whether a raise actually improves your standard of living or only keeps pace.

How the Calculation Works

Every figure is first converted to a yearly amount, and then divided back into each period. The number of periods in one year is:

• Hourly: hours per week x weeks per year
• Weekly: weeks per year
• Biweekly: weeks per year / 2
• Monthly: 12
• Yearly: 1

The new pay in raise mode is current pay x (1 + raise % / 100) for a percent raise, or current pay + raise amount for a fixed raise. The percent raise is new yearly pay / old yearly pay - 1. The raise per month is the yearly raise / 12, and the raise per hour is the yearly raise / (hours per week x weeks per year).

The real raise after inflation is (1 + raise) / (1 + inflation) - 1. This is more accurate than simply subtracting inflation from the raise. For example, a 5 percent raise with 3 percent inflation gives (1.05 / 1.03) - 1 = 1.94 percent, not exactly 2 percent.

A Worked Example

The page opens with these example values: a yearly salary of 50,000, 40 hours a week, 52 weeks a year, a 5 percent raise and 3 percent inflation.

• New yearly pay: 50,000 x 1.05 = 52,500.
• Raise per year: 2,500. Raise per month: 2,500 / 12 = 208.33.
• Hours per year: 40 x 52 = 2,080. Old hourly pay: 50,000 / 2,080 = 24.04. New hourly pay: 52,500 / 2,080 = 25.24. Raise per hour: 1.20.
• Old monthly pay: 4,166.67. New monthly pay: 4,375.00.
• Old biweekly pay: 1,923.08. New biweekly pay: 2,019.23.
• Real raise after 3 percent inflation: 1.94 percent.

In reverse mode, the example old pay of 50,000 and new pay of 53,000 gives a raise of 3,000, which is 6.00 percent. With 3 percent inflation the real raise is 2.91 percent.

A fixed raise example: if you earn 20 an hour and get 1.50 more per hour, your new rate is 21.50. That is a 7.50 percent raise. At 40 hours and 52 weeks, your yearly pay goes from 41,600 to 44,720, a raise of 3,120 a year or 260 a month.

How to Use the Calculator

1. Choose a Mode: Apply a raise, or Find the % raise.
2. Pick your Currency.
3. Enter your Current Pay and choose how it is Paid: hourly, weekly, biweekly, monthly or yearly.
4. Check Hours Per Week and Weeks Per Year. If you are paid for every week including holidays, keep 52.
5. In raise mode, choose Percent or Fixed amount and enter the raise. A fixed amount is per the pay period you chose, so 1.50 with hourly pay means 1.50 more per hour.
6. In reverse mode, enter your New Pay in the same pay period as your current pay.
7. Optionally enter an Inflation rate to see your real raise.
8. Read the results: the large figure at the top, the raise and real raise badges, the three raise tiles and the full table.

Use Reset to example to go back to the starting values.

Practical Uses

• Before a pay review. Work out what different percentages would mean in monthly money, so you know what to ask for.
• After a raise letter. Check that your new payslip matches the raise you were promised.
• Comparing job offers. Use reverse mode to see the percent increase a new job would give over your current pay.
• Hourly workers. See what a small hourly increase adds up to over a full year.
• Budget planning. Use the new monthly figure to update your budget.
• Checking buying power. Compare your raise with inflation to see if you are moving ahead or falling behind.

Limitations

All figures are gross pay, before tax, social contributions, pension contributions and other deductions. Your take-home raise will usually be smaller than the gross raise, and the tool does not estimate tax because rules differ by country and by person.

The conversions assume you work the same hours every week and are paid for the number of weeks you enter. Overtime, bonuses, commission, shift premiums and unpaid leave are not included. A month is treated as one twelfth of a year, so a single calendar month with an extra payday may look different on your payslip. Biweekly pay assumes weeks per year / 2 paychecks, which is 26 with the default of 52 weeks.

The real raise uses the single inflation rate you enter. Your own cost of living may rise faster or slower than a national average, depending on what you spend money on.

What to Do and What Not to Do

Do enter pay in the period your contract or payslip uses, to avoid conversion errors. Do set hours and weeks to match your real job. Do compare raises in percent, because a fixed amount means more to a low earner than to a high earner. Do look at the real raise when prices are rising quickly.

Do not enter a new pay in a different period from your current pay in reverse mode; both must use the same period. Do not treat the result as take-home pay. Do not compare a gross salary from one offer with a net salary from another. This tool gives estimates for planning and is not financial or legal advice.

Frequently Asked Questions