A raise, translated into the numbers you actually live by
A raise arrives as a single percentage — “5% this year” — which is the employer's unit, not yours. What you live by is the new salary itself, the size of the increase, and above all the monthly figure that lands in a budget. This calculator translates between all of them, in both directions. In percentage mode it takes your current pay and the raise on offer and returns the new pay: at the defaults, $60,000 with a 5% raise becomes $63,000 — an increase of $3,000 a year, $5,250 a month. In target mode it runs the sum backwards for negotiation and job-offer maths: tell it the salary you want, and it returns the percentage that journey represents — $60,000 to $66,000 is a 10% raise, a number worth knowing precisely before you ask for it. Both modes work for an annual salary or an hourly rate, and for the full picture of how pay is structured, the Salary Calculator in the Finance section breaks a salary down every way it can be paid.
The two formulas
Percentage changes are not symmetric, and the target formula shows why: going from $60,000 to $66,000 needs a 10% raise, but falling back from $66,000 to $60,000 is only a 9.09% cut, because each percentage is measured against a different starting figure. The same asymmetry explains why a salary cut followed by an equal-percentage raise never quite restores the original pay. For hourly workers the monthly figure annualises a 40-hour week across 52 weeks — a convention, stated openly, that part-time and variable schedules should rescale to their real hours; the hourly headline itself is exact regardless.
Reading an offer like an accountant
Three checks turn the headline number into a decision. First, compare percentages, not just amounts: $3,000 sounds identical in two offers, but on a $50,000 base it is 6% and on a $75,000 base it is 4% — the calculator's target mode gives the honest comparison when a new employer quotes a flat salary. Second, mind what the raise is measured against: a “5% raise” on base salary excludes bonuses, overtime and allowances, which may be a large share of real pay; ask which components move. Third, think monthly and after the fact: the monthly figure here is gross, and a raise's spendable value is that figure minus tax and deductions — while a raise that merely matches inflation preserves purchasing power rather than increasing it, which is worth knowing when a 3% offer is described as generous in a 5% inflation year. None of this argues against gratitude for a raise; it argues for knowing its size in the units your life is billed in.
Worked example
Percentage mode, the defaults: $60,000 × 1.05 = $63,000. The increase is $3,000 a year, and the new monthly pay is 63,000 ÷ 12 = $5,250. In target mode with the default target, $66,000, the required raise is 100 × 6,000 ÷ 60,000 = 10% — the figure to carry into a negotiation, rather than the vaguer “about ten percent-ish”.
How to use this calculator
- Choose what you know: the raise percentage, or the target pay.
- Choose annual salary or hourly rate.
- Enter your current pay, plus the percentage or the target, depending on the mode.
- Read the new pay in the headline, the increase and percentage in the stats.
- Use the monthly figure for budgeting — it is the raise in the unit your bills use.
Compounding: why small percentages are not small
Raises compound, because each one is measured against a salary already lifted by the last. Five consecutive 4% raises do not add 20% — they multiply: 1.04 five times over is about 21.7%, turning $60,000 into roughly $73,000, and the gap against a colleague receiving 2% in the same years widens every single year, because both the percentages and the bases diverge. That is why negotiating an early raise matters out of proportion to its first-year value, and why target mode exists: knowing that your goal is “10% from here”, and that each year of delay raises the base the next percentage must climb, is the whole strategy of pay growth in one observation. Run your own sequence through this page one raise at a time — the second run takes the first run's answer as its current pay — and the compounding stops being a slogan and becomes a number.