What is the difference between salary increase and pay raise?

In casual usage, "salary increase" and "pay raise" are synonyms; both refer to growing your compensation. However, "salary increase" often implies a permanent adjustment to your base annual salary, whereas a "pay raise" can technically refer to hourly wage hikes or even temporary bumps. Structurally, the calculation for both is identical.

Formula

Both use the Percentage Increase Formula: ((New Pay − Old Pay) ÷ Old Pay) × 100

Worked Example

• Scenario A (Salary): $50k annual salary becomes $55k. (10% increase)
• Scenario B (Hourly Raise): $20/hr becomes $22/hr. (10% raise)

Result: The math is the same regardless of the terminology.