Salary Raise Percentage
How much of a raise should you ask for? What does a 5% raise actually mean for your monthly take-home? And when should you be happy with what’s offered? Here is the practical maths behind salary negotiations.
How to calculate your new salary
New salary = Current salary × (1 + raise% ÷ 100)
| Current salary | Raise | New salary | Monthly extra |
|---|---|---|---|
| $40,000 | 3% | $41,200 | +$100 |
| $40,000 | 5% | $42,000 | +$167 |
| $40,000 | 10% | $44,000 | +$333 |
| $60,000 | 5% | $63,000 | +$250 |
| $80,000 | 8% | $86,400 | +$533 |
Use the Percentage Of Calculator to find the exact raise amount for any salary.
What is a “good” raise?
The answer depends on three factors: inflation, market rates, and your individual performance.
- Cost-of-living raise: matches inflation (2–4% in most developed economies in normal years, higher in high-inflation periods). This keeps your real purchasing power the same — it is not a real increase.
- Merit raise: above inflation, typically 4–8% for strong performance. This actually increases your living standard.
- Promotion raise: commonly 10–20%, though this varies widely by industry and seniority level.
- Job change: switching employers frequently yields 15–30% increases in salary, which is why job-hopping is mathematically effective for building wealth.
The real value of a raise: inflation matters
A 3% raise during a year with 4% inflation is actually a 1% pay cut in real purchasing power. To calculate the real raise:
Real raise = Raise% − Inflation%
(More precisely: (1 + raise/100) ÷ (1 + inflation/100) − 1, but the simple subtraction is a good approximation for small percentages.)
The compounding effect of raises over time
Percentage raises compound — each new raise is calculated on the new (higher) base salary. A series of raises adds up to more than the sum of the percentages:
- Three consecutive 5% raises = not 15% but 15.76% total increase
- Five consecutive 5% raises = not 25% but 27.6% total increase
This means a raise negotiated early in your career has an outsize effect on your lifetime earnings — every future percentage raise is applied to a higher base.
How to negotiate a raise
- Know your market rate. Look up current salaries for your role on platforms like Glassdoor, LinkedIn, and industry surveys. If you are below market, you have a stronger case.
- Ask for more than you expect to get. If you want 8%, ask for 12%. Anchoring high shifts the negotiation range in your favour.
- Frame it in concrete terms. Instead of “I’d like a raise,” say: “Based on my contribution to X and Y this year, I’m requesting a 10% increase, bringing my salary to $66,000.”
- Time it right. Ask after a visible win, before the company budget cycle closes, or at your annual review.
- Consider the full package. If salary is fixed, negotiate remote work days, extra holiday, pension contributions, or professional development — these have real monetary value.
Calculating the percentage increase from two salaries
If you want to know what percentage raise you received (or are being offered), use:
Raise% = (New − Old) ÷ Old × 100
Or use the Percentage Change Calculator: enter your old salary as the “from” value and your new salary as the “to” value.
Related tools
- Percentage Change Calculator — find what percentage raise you are being offered
- Percentage Of Calculator — find the exact cash value of a raise percentage
- 5 Percentage Mistakes Almost Everyone Makes