Pay Raise Calculator

What a raise adds to your pay

A raise is usually quoted as one number, 'a 3% increase' or 'a $2,000 bump', but that single figure lands in your bank account in a different way depending on how often you are paid. The calculator above converts your raise into every unit that matters: per year, per month, per paycheck and per hour.

The arithmetic is simple once you see it. Take the annual raise and divide it by the number of pay periods you have in a year:

• Weekly: 52 paychecks
• Biweekly: 26 paychecks
• Semi-monthly: 24 paychecks (the 1st and 15th, say)
• Monthly: 12 paychecks

A $2,600 annual raise is $50 a week, $100 per biweekly check, $108.33 per semi-monthly check, or $216.67 a month. Same raise, and the per-check figure swings by more than double. That matters when you are deciding whether the new number covers a car payment or a mortgage bump.

One caution before you spend it: this is your gross increase. Taxes, retirement contributions and any benefits you pay come out of it, so the amount that reaches your account is smaller. The calculator shows gross figures, which is what employers quote and what payroll systems use as a starting point.

Worked example: a 3% raise on $52,000

Let us run a real number. You earn $52,000 a year, paid biweekly, working 40 hours a week, and you are offered a 3% raise.

• Annual raise: $52,000 × 0.03 = $1,560
• New salary: $52,000 + $1,560 = $53,560
• Per biweekly paycheck: $1,560 ÷ 26 = $60.00 more
• New biweekly gross: $53,560 ÷ 26 = $2,060.00
• Per month: $1,560 ÷ 12 = $130.00 more
• Per hour (2,080 hours a year): $1,560 ÷ 2,080 = $0.75 more

Now compare it with a flat offer. If instead you are offered a $1,200 lump increase, the percentage is (1,200 / 52,000) x 100 = 2.31%, and your per-check gain is $1,200 ÷ 26 = $46.15. The 3% raise is worth $360 more a year than the flat $1,200 offer, which is exactly the kind of difference that is easy to miss when two offers are described in different units.

A third version: you are told your new salary is $54,000. The raise is $54,000 − $52,000 = $2,000, which is (2,000 / 52,000) x 100 = 3.85%, or $76.92 more per biweekly check.

Percent, flat amount or new salary, the three ways a raise is described

Employers describe raises in three different ways, and comparing two offers means getting them into the same unit first.

Two traps live in this table. First, a flat dollar amount sounds bigger than a percentage even when it is not, $1,200 on a $30,000 salary is a 4% raise, while the same $1,200 on an $80,000 salary is only 1.5%. Second, a raise can be quoted on your base pay or on your total compensation, which may include bonus or overtime. If the offer says '3% of base' and your bonus is excluded, the real increase is smaller than 3% of what you take home.

The Bureau of Labor Statistics employment cost index publishes what employers are paying out in wages and benefits each quarter, which is a useful benchmark when you are negotiating.

Raises, inflation and the real number

A raise that is smaller than inflation is a pay cut in disguise, and that is the single most important comparison to make.

To do that math yourself, subtract the inflation rate from your raise percentage. If you got 3% and prices rose 4.5%, your real raise is −1.5%, which on a $60,000 salary is about $900 of lost buying power over the year. That is not a reason to refuse the raise, but it is a good reason to ask for more next cycle.

Cost-of-living adjustments are the formal version of this. Social Security's annual COLA is the best-known US example, and the Social Security Administration publishes the COLA history and formula if you want to see how a benchmark is set. For private-sector wages, the BLS real earnings release compares pay growth against price growth directly.

What the raise looks like after tax

The calculator gives you the gross raise. What lands in your account is lower, and knowing roughly how much lower stops the surprise on the first new paycheck.

The raise is taxed at your marginal rate, the rate on your last dollar of income, not your average rate. In the US that means a raise is added on top of what you already earn, so it can push you into the next bracket even though the rest of your income is taxed at lower rates.

• Federal income tax: 10% to 37% depending on your bracket and filing status
• FICA: 7.65% for Social Security and Medicare on wages up to the annual cap
• State income tax: 0% in nine states, up to about 13% in the highest-tax states
• Retirement and benefits: if you contribute a percentage of pay, your contribution rises with the raise too

Run a rough version: a $3,000 raise for someone in the 22% federal bracket, a 5% state bracket and paying FICA takes home roughly $3,000 × (1 − 0.22 − 0.05 − 0.0765) = about $1,963. The IRS Tax Withholding Estimator will do the exact version with your real numbers.

Turning a raise into an hourly rate

If you are paid a salary, the hourly equivalent is the number that makes it comparable to other jobs, and to any side work you might take on.

The standard full-time year is 2,080 hours (40 hours × 52 weeks). So a $52,000 salary is $52,000 ÷ 2,080 = $25.00 an hour, and a $1,560 raise adds $0.75 an hour. If you work 45 hours a week instead, your year is 2,340 hours and the same salary is $22.22 an hour, the job pays less per hour, it just hides it.

This is where an hourly raise and a salary raise can look different. A $1 an hour raise on a 40-hour week is $2,080 a year, which is a 4% raise on $52,000 but a 2.6% raise on $80,000. Always convert both sides to the same unit before you decide which offer is better.