How to Calculate a Raise Percentage
A raise percentage is the increase divided by your old pay. The arithmetic takes one line; the harder part is knowing what the number means.
From a percentage to dollars
New pay = old pay × (1 + raise ÷ 100)
- $55,000 with a 3% raise: $55,000 × 1.03 = $56,650, an increase of $1,650 a year.
- $21 an hour with a 5% raise: $21 × 1.05 = $22.05 an hour.
To see the raise per paycheck, divide the yearly increase by your number of paychecks. A $1,650 raise paid every two weeks adds $63.46 to each gross check.
From a new salary to a percentage
Raise % = (new pay − old pay) ÷ old pay × 100
- $48,000 to $52,000: $4,000 ÷ $48,000 = 8.3%.
- $19 an hour to $20.50: $1.50 ÷ $19 = 7.9%.
Always divide by the old pay. Dividing by the new pay gives a smaller number and is a common mistake.
Raises compound
Each raise applies to pay that already includes the previous raise. Three years of 4% raises take $50,000 to $56,243, not $56,000. Over a decade, a 4% raise each year increases pay by about 48%.
Real raise vs. nominal raise
A raise only increases what you can buy if it is larger than inflation. The Bureau of Labor Statistics publishes the Consumer Price Index (CPI) every month; the 12-month change is the usual inflation figure.
Real raise ≈ raise % − inflation %. A 4% raise in a year with 3% inflation is roughly a 1% real raise. A 2% raise in that same year is a pay cut in purchasing power, even though the number on your stub went up.
Raises and job changes
Comparing a new offer with your current pay is the same calculation. Moving from $62,000 to a $70,000 offer is a 12.9% increase. Before comparing, convert both to the same basis: yearly gross for both, and the real hourly rate if the expected hours differ.
Hourly to salaried
When an hourly job becomes a salaried one, convert the hourly rate with 2,080 hours, then add any overtime you regularly earned. Someone at $28 an hour who averages 4 overtime hours a week earns $58,240 in base pay plus about $8,736 in overtime, so a $62,000 salary offer would be a pay cut, not a raise.
Run the numbers
The raise calculator works both ways: type a percentage to see the new pay, or type the new pay to see the percentage. Then use the pay converter to see the new amount per paycheck or per month.
Last reviewed October 2, 2026. General information, not financial, tax or legal advice.