How do you calculate a raise percentage?
Use one formula to find the percent and another to apply it.
Raise percent = (new pay minus old pay) / old pay x 100
New pay = old pay x (1 + raise percent / 100)
Say your salary goes from $55,000 to $58,000. The difference is $3,000, and $3,000 / $55,000 = 0.0545, so your raise is 5.45%.
Going the other way, a 4% raise on $55,000 is $55,000 x 1.04 = $57,200. That is $2,200 more a year, or about $84.62 more per biweekly paycheck before taxes.
The calculator above has two modes. Apply a raise takes your current pay and a percent or dollar raise and returns your new yearly pay, hourly rate and the extra per biweekly check. Find the raise % takes your old and new pay and returns the percent change. Both work with yearly or hourly pay.
How to calculate an hourly raise
The formulas are the same. A raise from $18.00 to $19.50 an hour is $1.50, and $1.50 / $18.00 = 8.33%.
To see what an hourly raise is worth per year, multiply the cents-per-hour increase by your yearly hours. At 40 hours a week for 52 weeks, that is 2,080 hours, so a $1.50 raise adds $3,120 a year. If you work a different schedule, see how many work hours are in a year.
What raise do you need to reach a target salary?
Use the raise percent formula with your target as the new pay. To go from $48,000 to $55,000, the gap is $7,000, and $7,000 / $48,000 = 14.58%.
That is a large single jump, so it helps to know the number before you talk to your manager. A gap this size often points to a promotion or a job change rather than an annual raise. Switch the calculator above to Find the raise % and try a few targets to see which ones are realistic.
The same math tells you the raise you need just to keep up with prices. If prices rose 3.4% over the past year, you need at least a 3.4% raise for your pay to buy what it did a year ago.
Raise examples: what 3%, 5% and 10% look like
New annual salary, with the yearly increase in parentheses, before taxes:
| Current salary | 3% raise | 5% raise | 10% raise |
|---|---|---|---|
| $40,000 | $41,200 (+$1,200) | $42,000 (+$2,000) | $44,000 (+$4,000) |
| $55,000 | $56,650 (+$1,650) | $57,750 (+$2,750) | $60,500 (+$5,500) |
| $75,000 | $77,250 (+$2,250) | $78,750 (+$3,750) | $82,500 (+$7,500) |
| $100,000 | $103,000 (+$3,000) | $105,000 (+$5,000) | $110,000 (+$10,000) |
And for hourly pay, assuming 2,080 hours a year:
| Current rate | 3% raise | Extra per year | 5% raise | Extra per year |
|---|---|---|---|---|
| $15.00 | $15.45 | $936 | $15.75 | $1,560 |
| $20.00 | $20.60 | $1,248 | $21.00 | $2,080 |
| $25.00 | $25.75 | $1,560 | $26.25 | $2,600 |
Your paycheck will not rise by the full amount. Taxes and deductions take a share of the added pay. Run your new salary through the paycheck calculator to see the take-home change.
What does a typical raise look like?
There is no single “normal” raise, and no federal law requires one. The Department of Labor notes that the Fair Labor Standards Act does not require pay raises.
A widely used official benchmark is the Bureau of Labor Statistics Employment Cost Index (ECI), which tracks how much employers’ wage costs change for the same jobs over time:
| Measure, 12 months ending June 2026 | Change |
|---|---|
| Wages and salaries, all civilian workers | Up 3.2% |
| Wages and salaries, private industry | Up 3.1% |
| Wages and salaries, state and local government | Up 3.4% |
| Private industry wages after inflation | Down 0.4% |
The ECI is an average across the economy, not a promise for your job. People who change roles, get promoted or work in high-demand fields can see much larger jumps, while others get nothing in a given year.
Does your raise beat inflation?
A raise only improves your standard of living if it outpaces price growth. The Consumer Price Index for All Urban Consumers rose 3.4% in the 12 months ending August 2026.
A quick check: raise percent minus inflation is roughly your real raise. A 4% raise against 3.4% inflation is a real gain of about 0.6%. A 2% raise in the same year is a real cut of about 1.4%, even though your paycheck went up.
Cost-of-living raise vs merit raise
| Type | What it is | How it is decided |
|---|---|---|
| Cost-of-living adjustment (COLA) | An across-the-board increase meant to offset inflation | Usually the same percent for everyone, often tied to a price index |
| Merit raise | A raise based on your performance | Set during reviews, often scaled by rating |
| Market or equity adjustment | A correction when your pay falls below the market rate or below peers in the same role | Triggered by pay studies, retention risk or a request |
| Promotion raise | A pay increase that comes with a bigger role or new title | Tied to the new job’s pay range |
| Minimum wage increase | A raise required when a state or city minimum goes up | Set by law for workers below the new minimum |
Social Security is a well-known example of a formal COLA: benefits rose 2.8% in 2026. Private employers are not bound to any index, and many fold cost of living and merit into one annual number. Ask your manager how your company splits it, because a 3% “merit” raise in a high-inflation year may really be a cost-of-living raise.
How do you ask for a raise?
- Know your number. Use the calculator above to turn a target salary into a percent, and the reverse. Ask for a specific figure, not “more.”
- Bring market data. Look at posted pay ranges for similar roles. State law can require employers to post them. In Illinois, for example, employers with 15 or more employees must include pay and benefits information in job postings made or republished after January 1, 2025.
- Document results. List what you delivered since your last raise: revenue, savings, projects, new skills or added duties.
- Time it well. Ask a month or two before budgets or reviews are set, or right after a big win.
- Ask in a meeting, then follow up in writing. A short email recap keeps the request on record.
A sample script:
“I’d like to talk about my compensation. Since my last review I’ve taken over vendor scheduling for both warehouses and cut overtime costs by about 12%. Based on that and on posted ranges for similar roles in our area, I’m asking to move from $55,000 to $59,000, which is a 7.3% increase. Can we discuss that before the budget is set?”
The same skills help when you are offered a new job. Our guide to answering salary expectations questions shows how to name a range with confidence.
Raise vs bonus vs promotion: which is worth more?
| Raise | Bonus | Promotion | |
|---|---|---|---|
| How often it pays | Every paycheck, every year | Once, unless repeated | Every paycheck, every year |
| Builds on itself | Yes, future raises use the higher base | No | Yes, and usually resets your pay range |
| Affects overtime rate (nonexempt) | Yes | Yes, if nondiscretionary | Yes, if you stay nonexempt |
| Best for | Long-term earnings | Rewarding a strong year | Bigger raise plus new scope |
Raises compound. A 3% raise every year turns $55,000 into about $63,760 after five years, because each raise is figured on the previous year’s higher pay.
A one-time $2,000 bonus is worth $2,000. A $2,000 raise is worth $2,000 every year you stay, plus a little more each time a future percent raise is applied to it. If you are offered a choice, the raise usually wins unless you plan to leave soon.
If you are hourly and nonexempt, a bonus you were promised, such as an attendance or production bonus, also raises your overtime rate for the weeks it covers, according to the Department of Labor. Our overtime calculator explains how that math works. And if your raise is retroactive, federal rules require overtime for the back period to be recalculated at the higher rate.
Common raise math mistakes
- Dividing by the new pay. The percent is always based on the old pay. $3,000 on $55,000 is 5.45%, not 5.17%.
- Adding percents across years. Two 5% raises are 10.25% total, not 10%, because the second one applies to the higher base.
- Assuming a cut and a raise cancel out. A 10% cut followed by a 10% raise leaves you 1% behind where you started.
- Forgetting the paycheck view. A $2,200 raise is about $84.62 per biweekly check, or $91.67 per semi-monthly check. See how many pay periods are in a year if you are unsure which you have.
- Ignoring benefits. A new job with a higher salary but fewer paid days off can be worth less. Use the PTO calculator to put a dollar value on leave.
Pay and tax situations vary, so for a big decision such as a counteroffer or relocation, a financial or tax professional can review the full picture.