Pay Raise Calculator (Real, After-Inflation)

1. Enter your current annual salary.
2. Choose whether you are entering the raise as a percent or as a new salary amount, then fill the matching box. By amount, the tool finds the percent for you.
3. Set the inflation rate. The 3.4 percent shown is only an example, so change it to the latest figure or your own estimate.
4. Adjust hours per week, weeks per year and pay periods if your schedule differs from the 40, 52 and 26 defaults.
5. Read the new salary, the real raise after inflation, your new hourly rate and the increase in each paycheck.

A pay raise has two sizes. The nominal raise is the extra money on your contract. The real raise is what that money can actually buy once prices have risen. If your pay goes up 3 percent but prices go up 3.4 percent, you can buy slightly less than before, even though your paycheck is larger.

This calculator separates the two. It grows your salary by the raise, then discounts the result by the inflation rate you enter, so you see the real gain or loss in buying power. For a plain salary-to-paycheck breakdown without inflation, use the salary calculator. To study prices on their own, see the inflation calculator.

Why it matters: a raise that trails inflation is a quiet pay cut. Seeing the real number helps you judge an offer, a yearly review, or a career move on honest terms rather than the headline percentage alone.

The tool uses the standard real-wage identity. It is simple arithmetic, not a forecast, so every number comes straight from what you type.

1. Grow the salary: multiply your current salary by one plus the raise percent.
2. Find the nominal raise: subtract the current salary from the new salary.
3. Remove inflation: divide one plus the raise by one plus the inflation rate, subtract one, and read it as a percent. This is the real raise.
4. Restate in today's dollars: multiply your current salary by the real raise percent.
5. Convert to hourly: divide the new salary by hours per week times weeks per year (40 x 52 = 2,080 by default).
6. Split per paycheck: divide the nominal raise by your pay periods per year.

Because the real raise divides rather than subtracts, a 3 percent raise against 3 percent inflation is not exactly zero in real terms; it is slightly negative. The calculator shows that precise figure instead of a rough guess. To turn the new salary into an hourly wage on its own, the salary-to-hourly calculator does the same 2,080-hour conversion.

Every number below was computed in code from the formulas above, and matches the worked examples in the verified data.

The first case is the one people miss. A 3 percent raise feels like a gain, but at 3.4 percent inflation it leaves you about -$232.11 worse off in real terms. The headline and the reality point in opposite directions.

Nominal pay is the number on your offer letter. Real pay is that number adjusted for what prices have done. Over a single year the gap can look small, but across several years it compounds.

A useful rule of thumb: to keep pace, your raise percent must be at least as high as inflation. Anything lower means you are comparing a bigger paycheck with even bigger prices. The inflation calculator can show how a given rate erodes a fixed amount over time.

The Inflation Rate You Choose

This is the single biggest lever. A higher inflation input lowers the real raise, and a raise below that rate turns negative. The 3.4 percent default is only an example reading; always replace it with a current or regional figure.

The Size of the Raise

Each extra point of raise adds almost a full point of real gain, slightly dampened by the division in the formula. A 2 percent raise rarely survives normal inflation; a 5 or 6 percent raise usually does.

Hours and Weeks Worked

The hourly figure depends on your schedule. Part-time hours or unpaid weeks change the hourly rate even when the salary is identical. Edit the 40 and 52 defaults to match your real hours.

Pay Frequency

The per-paycheck increase is the same annual money divided differently. Weekly pay spreads it over 52 checks; monthly pay over 12. It does not change your total, only the size of each deposit.

Taxes and Deductions

This tool works in gross pay. A raise can nudge part of your income into a higher bracket, so the take-home gain is smaller than the gross gain. See how gross maps to take-home for the next step.

At Your Annual Review

Before you accept the standard merit bump, check whether it beats current inflation. A 3 percent review in a 4 percent inflation year is a real pay cut, and the number makes that case for you.

Weighing a Job Offer

Convert a higher salary into its real gain over your current pay, and into an hourly rate, so two offers with different hours compare fairly.

Planning a Negotiation

Knowing the inflation-matching raise gives you a floor to ask for. Anything above it is a genuine real increase worth naming in the conversation.

Checking a Multi-Year Trend

Run each year with its own inflation rate to see whether a run of small raises has quietly left you behind.

1. Reading Only the Nominal Percent

A 4 percent raise is not automatically a gain. Compare it with inflation before you celebrate.

2. Subtracting Instead of Dividing

Real raise is not simply raise minus inflation. The exact identity divides one plus each rate, which is why 3 percent against 3 percent is slightly negative, not zero.

3. Using a Stale Inflation Number

Inflation moves. An old rate can flatter or punish a raise unfairly. Enter the latest figure you can find.

4. Mixing Gross and Net

Compare gross with gross. Bringing take-home pay into one side and gross into the other distorts the raise.

5. Ignoring Hours

A higher salary for longer hours can be a lower hourly rate. Always check the hourly equivalent.

6. Treating the Example CPI as a Fact

The 3.4 percent default is a labeled example, not an official current rate. It is there to be changed.

The calculator reproduces the real-wage arithmetic exactly for the numbers you enter. It is deterministic: the same inputs always give the same outputs, and nothing is forecast.

Grow your salary by the raise, then divide by inflation using the identity real raise = ((1 + raise percent) / (1 + inflation percent) - 1). For example, a 3 percent raise at 3.4 percent inflation gives about -0.39 percent, a small real pay cut.

It depends on inflation. At 3.4 percent inflation a 3 percent raise is a real pay cut of about 0.39 percent, because prices rose faster than your pay. In a year with inflation below 3 percent, the same raise is a real gain.

Because the two rates compound rather than add. The exact formula divides one plus the raise by one plus inflation. Subtraction is a close shortcut, but it is slightly off, which is why 3 percent against 3 percent is a little negative, not zero.

Use the latest Consumer Price Index (CPI-U) 12-month change from the Bureau of Labor Statistics, or a rate that fits your region and spending. The 3.4 percent shown in the tool is only an example and should be replaced with a current figure.

No. It is a labeled example of a recent CPI-U reading, left editable so you can enter the real number. Treat it as a placeholder, not an authoritative or live rate.

Divide the new salary by your paid hours per year. The default is 40 hours a week times 52 weeks, which is 2,080 hours. A $61,800 salary works out to about $29.71 per hour.

Divide the nominal raise by your number of pay periods. On 26 biweekly checks, an $1,800 raise adds about $69 per check before tax. The tool shows this as the per-paycheck increase.

Yes. Switch the entry box to "A new salary amount" and type the figure. The calculator derives the raise percent and then runs every other result from it.

No. It works in gross pay. A raise can move part of your income into a higher tax bracket, so your take-home gain is usually smaller than the gross raise shown here.

No. The calculation runs in your browser and nothing is sent to our servers. Anything you choose to Save stays in this browser only.

• Consumer Price Index (CPI) home page (U.S. Bureau of Labor Statistics, read 2026-10-06; use the latest 12-month change).
• Consumer Price Index news release (BLS, monthly CPI-U figures, read 2026-10-06).
• CPI Inflation Calculator (purchasing power over time) (BLS, read 2026-10-06).
• Economic news releases and real earnings (BLS, real earnings and CPI releases, read 2026-10-06).