A pay raise represents an increase in an employee's hourly wage or salary. It is calculated by subtracting the previous pay rate from the new pay rate and dividing the result by the previous rate. This metric is used to quantify career growth, negotiate compensation, and determine if income is keeping pace with inflation.

Did You Get a Raise? Calculate the Percentage Instantly

Formula

Pay Raise % = ((New Pay Rate - Old Pay Rate) / Old Pay Rate) * 100

Calculate Your Raise

Enter your previous pay rate (hourly, weekly, or annual).
Enter your new pay rate.
See your exact percentage pay raise.

Pay Raise Formula:

Pay Raise % = ((New Pay − Old Pay) ÷ Old Pay) × 100

Understanding Pay Raises

A pay raise increases your base earnings, meaning every hour you work or every paycheck you receive is larger than before. Unlike a bonus, which is a one-time event, a raise permanently lifts your financial baseline.

Calculating the percentage of your raise is critical for negotiation. If inflation is 4% and your raise is 3%, your "real wage" has actually decreased in purchasing power.

How to Check Your Pay Raise

Check your pay stub or offer letter for your Old Rate.
Confirm your New Rate.
Use the calculator above or the formula: (New - Old) / Old.
Multiply by 100 to get the percentage.

Example: Only a $1 raise? If you were making $10/hr, that is a huge 10% raise. If you were making $50/hr, that is a tiny 2% raise. Context matters.

Types of Pay Raises

Merit Raise: Performance-based, usually annual.
COLA (Cost of Living): Inflation-based, keeps buying power steady.
Market Adjustment: brings you up to current market rates for your role.
Internal Equity: ensures you are paid similarly to peers in the same role.

Recent Raise Examples

$15/hr to $16/hr

Result: 6.67% raise

$20/hr to $25/hr

Result: 25% raise

$50k to $53k

Result: 6% raise

$75k to $85k

Result: 13.33% raise

$30/hr to $31/hr

Result: 3.33% raise

$100k to $115k

Result: 15% raise

$18.50 to $20.00

Result: 8.11% raise

$45k to $46.5k

Result: 3.33% raise

$1200/wk to $1300/wk

Result: 8.33% raise

$60k to $72k

Result: 20% raise

$24/hr to $26.50/hr

Result: 10.42% raise

$90k to $95k

Result: 5.56% raise

$14/hr to $15/hr

Result: 7.14% raise

$200k to $220k

Result: 10% raise

$55k to $57k

Result: 3.64% raise

Pay Raise FAQ

Is pay raise calculated on gross or net pay?

Always calculate raises based on your GROSS pay (before taxes). This is the official number your employer uses for your salary or hourly rate.

How do I calculate an hourly raise?

Subtract old hourly rate from new hourly rate. Divide the difference by the old rate. Multiply by 100. Example: ($22 - $20) / $20 = 0.10, which is 10%.

What is the average pay raise percentage?

Average annual merit increases usually hover around 3%. Inflation adjustments might add another 1-3%. High performers or those getting promotions often see 10-20%.

Does a bonus count as a pay raise?

Technically, no. A pay raise increases your base salary permanently. A bonus is a one-time payment. Raises compound over time; bonuses do not.

Key facts

Pay raises are categorized into merit increases, cost-of-living adjustments (COLA), and promotional bumps. Frequent small raises (2-3% annually) are often used to retain employees against market inflation. Calculating raises based on gross pay is the industry standard for employment contracts and negotiations. The compounding effect of annual raises means that even small percentage increases lead to significant long-term wealth.

Trend & Behavior Analysis

As the new pay rate increases while the old rate remains constant, the pay raise percentage grows linearly. This upward trend indicates positive career momentum and increased purchasing power. Conversely, if the raise percentage is zero or below the local inflation rate, the employee's 'real' income is effectively stagnating or declining.