Nominal vs real raises
A raise only increases your buying power if it is bigger than inflation. A 4% raise in a year with 3% inflation is a real raise of about 1%, and a 2% raise in that year is a pay cut in real terms. The calculator divides one plus the raise by one plus inflation to give the real change.
Recent US inflation figures are published monthly by the Bureau of Labor Statistics as the Consumer Price Index. For a quick check of how prices have moved over any period, use our inflation calculator.
Put the raise to work
A raise is one of the easiest moments to save more, because you never get used to spending the extra. Directing half of every raise to savings or retirement contributions raises your savings rate without a cut to your current lifestyle.
Common questions
What is a good raise?
Anything above inflation increases buying power. Typical US merit raises have been around 3% to 4% in recent years, with bigger jumps usually coming from promotions or job changes.
How do I calculate a raise percentage?
(New salary ÷ old salary − 1) × 100.
How much more will I take home?
Less than the gross raise, since tax and deductions apply to the extra pay too.
This calculator gives estimates for planning. Real returns, rates and prices change, so treat the result as a guide rather than a promise. Read how we build and check our calculators.