Put a raise into real numbers
“Four percent” sounds good in a review meeting, but it is hard to feel. What matters is how much more lands in each paycheck, and whether the raise keeps up with rising prices. This calculator turns a raise, given as a percentage or as a new salary, into those concrete figures.
The formulas
- New salary = current salary × (1 + raise %)
- Raise % = (new salary − current salary) ÷ current salary
- Extra per paycheck = annual increase ÷ number of paychecks per year
- Extra take-home ≈ extra per paycheck × (1 − marginal tax rate)
- Real raise = (1 + raise %) ÷ (1 + inflation) − 1
Why a marginal rate for the take-home estimate? Your raise is taxed at the rate of your top bracket, not your average rate. For most middle earners that means 22% federal, plus state tax, plus 7.65% FICA.
Worked example: 4% on $70,000
- New salary: 70,000 × 1.04 = $72,800.
- Extra gross pay: $2,800 a year, or $233.33 a month.
- Paid biweekly: 2,800 ÷ 26 = $107.69 more per paycheck.
- In a state with no income tax, the marginal rate is 22% + 7.65% = 29.65%, so take-home rises by about $75.76 per paycheck.
- With 3% inflation, the real raise is 1.04 ÷ 1.03 − 1 = 0.97%: you are slightly ahead, but most of the raise only offsets higher prices.
What different raises are worth
| Raise | New salary | Extra gross per paycheck | Real raise at 3% inflation |
|---|---|---|---|
| 2% | $71,400 | $53.85 | −0.97% |
| 3% | $72,100 | $80.77 | 0.00% |
| 4% | $72,800 | $107.69 | 0.97% |
| 5% | $73,500 | $134.62 | 1.94% |
| 7% | $74,900 | $188.46 | 3.88% |
| 10% | $77,000 | $269.23 | 6.80% |
A 3% raise in a 3% inflation year leaves your purchasing power exactly where it was. Anything below inflation is a pay cut in real terms.
Will a raise push me into a higher bracket?
Only the dollars above a bracket threshold are taxed at the higher rate, so a raise can never reduce your take-home pay through income tax. The calculator’s marginal rate lets you see the effect: enter 24% + state + FICA if the raise crosses into the next bracket.
Using the numbers in a negotiation
- Anchor the conversation on market data for your role and city, not only on inflation.
- Ask for the raise as an annual figure, and check the per-paycheck amount here before you accept.
- If the salary budget is fixed, a larger 401(k) match, an extra week of paid time off or a signing bonus can close the gap.
- Compounding matters: an extra 1% this year is built into every future raise, so it is worth more than a one-off bonus of the same size.