How this is calculated
new salary = current × (1 + raise ÷ 100); real raise = raise % − current inflation %
The headline math is easy: new salary = old salary × (1 + raise%). The number your life notices is smaller — the extra per month or per paycheck — which is why a '5% raise' that sounds substantial arrives as a modest line on the pay stub, further trimmed by taxes since raises are taxed at your top marginal rate.
The honest number is the real raise: your percentage minus inflation. Prices rising 3.5% while your pay rises 5% means your purchasing power grew only ~1.5%. A raise below inflation — common in high-inflation years — is a pay cut wearing a party hat. This tool pulls the current US year-over-year inflation figure automatically so the comparison stays honest.
When negotiating, anchor on market rate rather than percentage-over-current: a 20% raise to a underpaid salary may still be below what the role pays elsewhere. Percentages compound though — a raise won today lifts the base of every future raise, which is why early-career negotiations matter disproportionately.
Frequently asked questions
What's an average raise?
US annual merit increases typically run 3-5%; promotions commonly bring 10-15%; changing employers often brings the largest jumps. Anything below current inflation is a real-terms cut.
Why is my paycheck increase smaller than the math here?
Taxes. The raise is taxed at your highest marginal rate, so a $250/month gross raise may arrive as $170-200 net depending on your bracket and state.
Percentage raise or flat amount — which should I negotiate?
At lower salaries a flat amount is often worth more; at higher salaries percentages win. Convert whichever offer you get into both forms before comparing — this calculator does the percentage side instantly.