Salary Increase Calculator: Pay Raise & New Wage Estimator
Free salary increase calculator. Calculate your pay raise, new salary, hourly wage conversion, and take-home pay boost after an annual or percentage raise.
New Annual Salary
Annual Increase
New Hourly Rate
Bi-Weekly Paycheck Boost
Estimated Monthly Net Boost
Pay Frequency Breakdown
Before vs. After Raise| Pay Period | Current Pay | Gross Increase | New Gross Pay |
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How to Calculate a Salary Increase
Calculating a pay raise involves determining the percentage increase relative to your baseline earnings, or converting a flat wage increase across all common payroll cycles (hourly, weekly, bi-weekly, semi-monthly, and annual).
1. Percentage Raise Formula
New Salary = Old Salary × (1 + Raise% / 100)
For example, a 6% raise on a $75,000 base salary is: $75,000 × 1.06 = $79,500/year (an increase of $4,500).
2. Dollar Increase to Percentage
Raise % = ((New Salary - Old Salary) / Old Salary) × 100
If your salary increases from $80,000 to $88,000, your raise percentage is: (($88,000 - $80,000) / $80,000) × 100 = 10%.
Understanding Your Take-Home Pay Boost
Gross salary increases do not convert 1:1 into take-home pay. Because United States payroll taxes utilize progressive marginal tax brackets, your raise is taxed at your highest applicable marginal federal bracket plus state taxes and FICA (6.2% Social Security + 1.45% Medicare). For example, if you are in the 24% federal tax bracket and pay 5% state tax plus 7.65% FICA, each additional $1,000 of raise delivers roughly $633.50 in take-home cash.
Average Salary Increase Benchmarks (2026)
- Cost of Living Adjustment (COLA): 2.5% to 3.5% annually to protect purchasing power against baseline inflation.
- Performance / Merit Raise: 4.0% to 7.0% for solid contributors meeting or exceeding target benchmarks.
- Internal Promotion: 8.0% to 15.0% when taking on expanded scope, title, or managerial duties.
- External Job Switch: 10.0% to 25.0%+ when moving to a new employer in competitive industries.
Frequently Asked Questions
What is a good salary increase percentage?
Historically, standard annual cost-of-living adjustments (COLA) range from 3% to 4%, strong performance or merit raises average 4% to 7%, and promotions or job changes typically command a 10% to 20%+ increase in base compensation.
How do I calculate a salary increase percentage?
Subtract your old salary from your new salary to determine the dollar raise, divide that difference by your old salary, and multiply by 100: Raise % = ((New Salary - Old Salary) / Old Salary) × 100%.
How do I convert an hourly pay raise into an annual salary increase?
Assuming a standard 40-hour work week and 52 weeks per year (2,080 working hours annually), multiply your hourly raise by 2,080. For example, a $2.50/hour raise equals an annual gross increase of $5,200 ($2.50 × 2,080).
Will a pay raise push me into a higher tax bracket and reduce my take-home pay?
No. United States federal income taxes use progressive marginal tax brackets. Only the dollars earned above each tax bracket threshold are taxed at the higher marginal rate; income below the threshold remains taxed at the lower previous rates. A pay raise will always increase your net take-home pay.