Pay Raise Calculator
Calculate how a pay raise or promotion affects your income. See the impact on your hourly, monthly, and annual earnings.
How to use: Enter your current pay information and the details of your raise. The calculator will show how your earnings will change across different time periods.
Understanding Pay Raises
A pay raise is an increase in your salary or hourly wage. Pay raises typically come from one of these sources:
- Cost of Living Adjustments (COLA): Typically 2-5% annually to account for inflation.
- Merit Increases: Based on performance, usually 3-8%.
- Promotions: When taking on more responsibility, often 10-20% or more.
- Market Adjustments: To align your salary with current market rates.
When evaluating a pay raise, consider:
- How the raise compares to inflation
- Changes in job responsibilities
- How your new salary compares to market rates
- The complete compensation package (including benefits)
A well-planned raise negotiation can significantly impact your lifetime earnings, as each raise builds upon your previous salary level.
Frequently Asked Questions
What is a good percentage for a pay raise?
The average pay raise is around 3-5% annually, mainly to keep pace with inflation. Merit-based increases are typically 4-8%, and promotions often come with 10-20% or higher increases.
How do I know if my raise is fair?
Research market rates for your position, experience level, and location using sites like Glassdoor, Payscale, or industry surveys. Consider your performance, new responsibilities, and the company's financial health.
How often should I expect a raise?
Most companies provide annual cost-of-living adjustments. Merit-based raises often follow performance reviews, which may be annual or semi-annual. Going 18-24 months without any increase is typically longer than average.
Should I adjust my tax withholdings after a raise?
A significant raise might push you into a higher tax bracket. Consider consulting with a tax professional to adjust your withholdings to avoid unexpected tax bills.