Business & Work
Salary Increase Calculator
Work out a raise percentage, a new salary, or what several raises in a row actually add up to.
Free to useNo sign-up requiredNo watermarkRuns in your browser
Last reviewed: 13 October 2026 by Vishal Senthilkumar
"Salary increase" questions usually come in one of four shapes: you know the old and new salary and want the percentage; you know the old salary and a percentage and want the new figure; you know the old salary and a target salary and want the percentage you need to ask for; or you have several raises - this year and next, say - and want to know what they add up to.
The fourth is the one most often got wrong: two 5% raises in a row are not a 10% raise. The second raise also applies to the gain from the first, so it compounds to 10.25%. This tool keeps that distinction explicit instead of quietly adding percentages together.
How this tool works
Pick the calculation
The four tabs cover the four directions above - switching tabs loads a sensible worked example.
Enter the salary figures
Pick a currency and a pay period label (the maths does not convert between periods - enter both salaries in the same one).
Read the result
The headline answer, plus a breakdown explaining how it was reached.
How it works
Percentage increase is (new salary − old salary) ÷ old salary × 100, measured against the size of the old salary so a falling salary still reports a sensible negative percentage.
A new salary from a known raise percentage is old salary × (1 + percentage ÷ 100) - the same formula solved for the other unknown.
Several raises applied one after another compound: each one is applied to the salary that already includes every raise before it, not to the original salary again. The overall equivalent percentage is calculated from the final result, not by adding the individual percentages.
The optional real (inflation-adjusted) raise uses the exact Fisher relation (1 + real) = (1 + nominal) ÷ (1 + inflation), rather than the commonly-seen shortcut of just subtracting inflation from the raise, which understates the true figure at higher rates.
Why two 5% raises are not a 10% raise
A $5,000 salary with a 5% raise becomes $5,250. A further 5% raise is applied to $5,250, not the original $5,000 - that gives $5,512.50, which is a 10.25% increase on the original salary, not 10%.
The gap grows with the size and number of the raises. It is small for one or two modest raises but becomes significant across several years or larger percentages, which is why multi-year pay histories should never simply be summed.
A raise is not automatically a real increase in pay
A 4% raise in a year with 4% inflation leaves your purchasing power exactly where it was - a 0% real raise. A 3% raise against 5% inflation is a real pay cut, even though the number on the payslip went up.
This matters most when comparing a raise against a cost-of-living figure, or when a multi-year raise needs to be judged against inflation over the same years rather than against a single year's figure.
Formula
Percentage increase
% = (new − old) ÷ old × 100
New salary from a raise %
new = old × (1 + % ÷ 100)
Raise needed for a target salary
% = (target − old) ÷ old × 100
Several raises, compounded
final = old × (1 + p₁ ÷ 100) × (1 + p₂ ÷ 100) × ...
Each raise multiplies the result of the one before it - the percentages are not added together.
Real (inflation-adjusted) raise
(1 + real) = (1 + nominal) ÷ (1 + inflation)
Worked examples
A salary rising from $10,000 to $11,200
(11,200 − 10,000) ÷ 10,000 × 100 = 12% - the most common mistake is dividing by the new salary (11,200) instead of the old one, which understates the real percentage.
A 5% raise on a $5,000 salary
$5,000 × 1.05 = $5,250. Against 3% inflation over the same period, the real raise is (1.05 ÷ 1.03 − 1) × 100 ≈ 1.94%, not the naive 5% − 3% = 2%.
Two 5% raises in a row, starting at $5,000
$5,000 → $5,250 → $5,512.50. That is a 10.25% overall increase, not 10% - the second 5% applied to $5,250, not $5,000.
Frequently asked questions
What is the formula for a salary increase percentage?
(new salary − old salary) ÷ old salary, multiplied by 100. Always divide by the OLD salary - dividing by the new one understates the real increase.
How do I find my new salary from a percentage raise?
Multiply the old salary by (1 + the raise percentage as a decimal). A 7% raise on $50,000 is $50,000 × 1.07 = $53,500.
Do two 5% raises add up to a 10% raise?
No - 10.25%. The second 5% raise applies to the salary after the first raise, not the original salary, so the gains compound.
What is a "real" pay raise?
A raise adjusted for inflation over the same period, reflecting actual purchasing power rather than the nominal number. A raise below the inflation rate is a real pay cut even though the salary figure went up.
Does this convert between hourly, monthly and annual pay?
No - the pay-period field is a label only. Enter both the old and new figures in the same period; converting between periods needs assumptions (hours per week, weeks worked per year) this tool does not make for you.