Pay Raise Calculator
A raise is quoted as a percentage and felt as a number on a paycheck. This converts between them, and shows what is left of the increase once tax and inflation have taken their share.
On this page
Three different numbers, all called "the raise"
A 4% raise on $78,000 is $3,120 a year. It is also $120 a paycheck on a biweekly schedule, about $89 after a 26% marginal rate, and — against 2.9% inflation — a real increase of just over 1%.
All four figures are true and they answer different questions. The annual figure is what you negotiated. The per-paycheck figure is what you will actually notice. The after-tax figure is what you can spend. The inflation-adjusted figure is whether you are better off than last year.
The real raise, computed properly
Subtracting inflation from the raise is the usual shortcut and it is slightly wrong. The correct calculation is a ratio:
real raise = (1 + raise) ÷ (1 + inflation) − 1
At 4% against 2.9% inflation, subtraction gives 1.1% and the ratio gives 1.07%. The difference is small at these levels and grows quickly when either figure is large — at 20% inflation the shortcut is meaningfully off.
The consequence is worth stating plainly: a raise below the inflation rate is a pay cut. The money goes up and buys less than your current pay does today. That happens more often than raise conversations acknowledge.
Why the paycheck increase looks small
Two reasons, and both are ordinary. A $3,120 annual raise is spread across 26 paychecks, so each one grows by $120 — a figure that can feel underwhelming against the annual number that was discussed.
Then tax and deductions take a share. If you contribute a percentage of pay to a retirement plan, that percentage now applies to a larger number, so part of the increase is diverted before it reaches your account. That is money saved rather than money lost, but it does explain the gap between the raise you were told about and the deposit you see.
A worked example
$78,000, a 4.5% raise, paid biweekly, with 2.9% inflation and a 26% estimated rate.
The new salary is $81,510, an increase of $3,510 a year. That is $135 more per paycheck before tax and about $100 after. The real increase after inflation is 1.56%, so purchasing power rose by roughly $1,200 in today's money rather than by $3,510.
Run the same raise against 5% inflation and the real figure turns negative: the salary rises and the standard of living falls.
Working backwards from a target
Switch the mode and enter the pay you want instead of a percentage, and the calculator reports what percentage that represents. It is the more useful direction for a negotiation: going in with "I am looking for $88,000" and knowing that is a 12.8% increase is better preparation than asking for a percentage and doing the arithmetic afterwards.
What this does not cover
- Actual tax. The rate is yours to supply. Marginal rates, payroll tax, and state tax all differ, and a raise can move part of your income into a higher bracket. The take-home pay calculator does this properly.
- Benefit changes. A promotion often changes more than salary — bonus target, equity, retirement match.
- Bracket effects on credits. A higher income can reduce income-tested credits, which offsets part of a raise for some households.
- Your personal inflation. The national CPI is an average; your own basket of rent, food, and childcare may have moved very differently.
See our methodology for how these tools are built and tested.
Frequently asked questions
How much is a 3% raise on $60,000?
$1,800 a year — $69.23 per paycheck on a biweekly schedule, or about $51 after a 26% rate.
Against 3% inflation it is a real increase of zero: the same purchasing power, restated in larger numbers.
Is my raise keeping up with inflation?
Only if the percentage is above the inflation rate over the same period. Enter the current CPI figure from the Bureau of Labor Statistics and the calculator reports the real increase directly.
A negative real raise is common in high-inflation years and it is worth naming in a compensation conversation, because it is a specific and checkable claim.
Why is my new paycheck smaller than I expected?
Withholding rises with pay, and percentage-based deductions rise with it too. A 6% retirement contribution on a larger salary takes a larger amount, so part of the raise is redirected rather than deposited.
It is also worth checking whether the raise took effect mid-period, which makes the first paycheck a blend of the old and new rates.
What tax rate should I enter?
Your marginal rate — the rate on the next dollar, not your average rate. Adding 7.65% for Social Security and Medicare gives a fuller picture of what the increase costs.
It is an estimate either way. For a real figure, run your old and new salaries through the take-home pay calculator and compare.
Should I ask for a percentage or a number?
A number. It is concrete, it is checkable against market data for the role, and it avoids the ambiguity of what a percentage is being applied to.
Use the target mode here to see what percentage your number represents, so you are not surprised by the framing when it comes back.
Related calculators
This calculator is provided for general educational and estimation purposes only and is not financial or tax advice. The after-tax figure uses a flat rate you supply and is not a tax calculation — a raise is taxed at your marginal rate, and part of it may fall into a higher bracket.