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Calculate how much your pay has increased and see what your raise means for your income.

Compare your pay rise with inflation to see whether your purchasing power has actually improved.

Pay Rise Calculator

How to Use the Pay Rise Calculator

Step 1 – Enter your current salary
Enter your annual salary before the pay rise. Use your gross salary before taxes and deductions.

Step 2 – Enter your pay rise percentage
Enter the percentage increase you have received or expect to receive.

Step 3 – Enter an inflation rate
Use an annual inflation rate that reflects the scenario you want to compare. You can try different rates to see how inflation may affect the real value of your raise.

Step 4 – Review your results
The calculator will automatically show:

Your new annual salary
Your annual and monthly pay increase
The salary needed to keep pace with inflation
Your estimated real purchasing power change
Whether your pay rise is ahead of, close to, or behind inflation

Tip: Try several inflation rates rather than relying on a single assumption. This can give you a clearer picture of how your pay rise may perform under different scenarios.

What Is a Pay Rise Calculator?

A pay rise calculator helps you see how a salary increase changes your income and how that increase compares with inflation.

For example, if your salary increases from $60,000 to $63,000, that's a 5% pay rise. But if prices are also rising, the increase in your purchasing power may be smaller than 5%.

This calculator compares your nominal pay rise with inflation to estimate your real purchasing power change. It also shows your new salary, annual and monthly increase, and the salary you would need simply to keep pace with inflation.

This makes it easier to see whether your pay rise may leave you ahead of inflation, roughly keeping pace, or losing purchasing power.

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What Is a Real Wage Increase?

A real wage increase happens when your pay grows faster than inflation, meaning your income has increased in purchasing-power terms.

There are three main outcomes when comparing a pay rise with inflation:

You beat inflation
Your pay rise is higher than the inflation rate. This generally means your purchasing power has increased.

You roughly match inflation
Your pay rise is close to the inflation rate. Your purchasing power is broadly maintained, although your actual household expenses may rise at a different rate.

You fall behind inflation
Your pay rise is lower than the inflation rate. You may be earning more in dollar terms, but your estimated purchasing power has decreased.

For example, a 3% pay rise may sound like an improvement, but if inflation is 4%, the real value of that increase is negative.

That's why it's useful to look at both your nominal pay rise and your inflation-adjusted change. The Pay Rise Calculator compares the two automatically so you can see the difference.

What Is a Pay Rise Calculator Used For?

A pay rise calculator can help you understand what a salary increase means after considering inflation. Here are some practical ways to use it:

Negotiating your next raise
Compare a potential pay rise with inflation to understand how much of an increase may be needed to maintain or improve your purchasing power.

Evaluating a pay rise
A higher salary does not always mean the same increase in purchasing power. The calculator helps you compare your percentage raise with inflation.

Comparing job offers
If a new job offers a higher salary, enter the percentage increase to see how the change compares with inflation before considering other factors such as benefits, hours and working conditions.

Checking cost-of-living increases
If your employer offers an annual cost-of-living adjustment, you can compare the percentage increase with your chosen inflation rate.

Planning your household budget
Seeing your estimated monthly pay increase can help you decide how much of the extra income could go toward spending, saving, investing or paying down debt.

Testing different scenarios
Try different pay rise and inflation rates to see how changes in either figure could affect your estimated purchasing power.

Real-Life Example

Scenario 1 – When a Pay Rise Doesn’t Beat Inflation

Jessica earns $65,000 a year. At her annual review, she receives a 2.5% pay rise, increasing her salary to $66,625.

That sounds like good news — an extra $1,625 per year.

But suppose inflation over the same period is 4.2%.

Jessica is earning $1,625 more in nominal dollars, but her new salary is $1,105 below the amount that would represent a 4.2% increase on her previous salary.

What this means: Her salary increased, but the 2.5% pay rise did not keep pace with the 4.2% inflation example. A salary of approximately $67,730 would represent a 4.2% increase from $65,000.

This is exactly the kind of comparison the Pay Rise Calculator can help you make.

Scenario 2 – The Strong Negotiator

Marcus earns $80,000 a year. Before his salary review, he uses the Pay Rise Calculator to see how inflation affects his purchasing power.

Using an example inflation rate of 3.8%, Marcus would need a salary of about $83,040 just to maintain the same purchasing power.

He decides to ask for a 7% raise, which would increase his salary to $85,600.

His employer counters with a 5.5% raise, bringing his new salary to $84,400.

With a 5.5% pay rise compared with 3.8% inflation, Marcus comes out ahead in real terms.

What this means: Knowing your numbers before a salary negotiation can help you set a clear minimum and a realistic target instead of focusing only on the headline pay rise.

Scenario 3 - Three Years of Small Raises Adding Up

David starts with a salary of $70,000 and receives a 2% pay rise each year for three years. On paper, his salary keeps increasing.

But suppose inflation averages 5% per year during the same period.

Even though David earns more each year, prices are rising faster than his salary. This means his real purchasing power gradually falls.

After three years, David's salary has increased from $70,000 to about $74,285, but his purchasing power is equivalent to only around $64,160 in starting-year dollars.

What this means: A pay rise doesn't automatically mean you're financially better off. When your salary grows more slowly than inflation for several years, the effect can compound and gradually reduce what your income can buy.

Understanding Pay Rises, Inflation and Real Wage Growth

What is nominal wage growth?
Nominal wage growth is the percentage increase in your salary before adjusting for inflation. For example, if your salary rises from $60,000 to $63,000, that is a 5% nominal increase.

What is real wage growth?
Real wage growth adjusts your pay increase for inflation. It gives you a better idea of whether your purchasing power has actually improved.

For example, if your pay rises by 5% while inflation is 2%, your real purchasing power has increased. If inflation is higher than your pay rise, your purchasing power may fall.

What is a cost-of-living adjustment?
A cost-of-living adjustment, sometimes called a COLA, is a pay increase intended to help income keep pace with rising prices. The amount may or may not exactly match the inflation rate.

What is wage stagnation?
Wage stagnation describes a period when wages grow very slowly or remain mostly unchanged. If prices continue rising at the same time, workers may experience a decline in real purchasing power.

What is the difference between inflation and wage growth?
Inflation measures how quickly prices are rising, while wage growth measures how quickly earnings are increasing.

If wages rise faster than inflation, purchasing power generally improves. If inflation rises faster than wages, purchasing power can decline.

How Much of a Pay Rise Should You Ask For?

There isn't one percentage that's right for everyone. A better approach is to consider inflation, your performance, changes in your responsibilities, and the market rate for your role.

Know your inflation benchmark: Use the Pay Rise Calculator to see what salary increase would be needed to maintain roughly the same purchasing power.

Check your market value: Compare your current salary with similar roles requiring comparable experience, skills, and responsibilities in your location.

Consider your performance: Strong results, new skills, additional responsibilities, promotions, or measurable contributions can strengthen the case for a higher salary.

Set a realistic target: Use your research to decide on a target salary rather than choosing a percentage based only on inflation.

Support your request with:

Specific achievements and measurable results
Additional responsibilities you've taken on
Relevant skills or qualifications you've gained
Current salary data for comparable positions
Your calculated inflation-adjusted salary

Tip: Inflation can be a useful reference point, but it shouldn't be the only reason for requesting a pay rise. Your value in the market and contribution to the role are also important.

Frequently Asked Questions

1. How do I calculate a pay rise?
Multiply your current salary by the pay rise percentage, then add that amount to your current salary. For example, a 5% raise on a $60,000 salary is $3,000, giving you a new salary of $63,000.

2. How much is a 5% pay rise?
A 5% pay rise means your salary increases by 5% of your current pay. If you earn $70,000, a 5% raise is $3,500, bringing your new salary to $73,500.

3. How much of a pay rise should I ask for?
There is no single percentage that suits everyone. Consider your performance, additional responsibilities, experience, market salary data and inflation when deciding what to request.

4. What is a good pay rise percentage?
A good pay rise depends on your role, industry, location, performance and current market value. Instead of focusing on one percentage, compare your proposed new salary with market rates and changes in your responsibilities.

5. Does a pay rise above inflation mean I am better off?
Generally, if your pay grows faster than inflation, your purchasing power improves. However, taxes, living costs and changes in your personal expenses can also affect how much better off you actually are.

6. What happens if my pay rise is lower than inflation?
You may earn more money in dollar terms while having less purchasing power. This is because the prices of goods and services are increasing faster than your income.

7. What is the difference between a nominal and real pay rise?
A nominal pay rise is the percentage increase in your salary before accounting for inflation. A real pay rise adjusts for inflation to show how your purchasing power has changed.

8. Can I use this calculator for any country?
Yes. The Pay Rise Calculator can be used with salaries in any currency because the calculations are based on your salary, pay rise percentage and inflation rate. Enter an inflation rate relevant to your country or situation.

Plan What to Do With Your Pay Rise

A pay rise can improve your finances, but what you do with the extra income matters too. Before increasing your spending, consider how the additional money could support your financial goals.

You might use some of your increased income to build savings, reduce debt, strengthen your emergency fund, or invest for the future.

Explore these free calculators to plan your next step:

Budget Calculator — see how your new income fits into your monthly budget.
Savings Goal Calculator — calculate how your pay rise could help you reach a savings target faster.
Emergency Fund Calculator — work out how much you may need for unexpected expenses.
Debt Payoff Calculator — see how extra repayments could reduce your debt faster.
Retirement Calculator — explore how increasing long-term contributions could affect your future savings.