Pay Raise Calculator

Calculate your new pay after a raise using our raise calculator. Plus, learn how to calculate a pay increase below.


New Pay and Wages:

Percent Increase:
Current PayRaisePay After Raise
Learn how we calculated this below

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How to Calculate a Pay Raise

There are a few different ways an employer might offer a pay raise: a percentage increase on your current wage, a raise by an amount per hour, or an entirely new pay rate. To calculate a pay raise, you’ll need one of the following formulas:

Percentage Pay Raise Formula

To calculate a raise by a percentage, use the following formula:

new pay = current pay + (current pay × raise percentage)
So, the new pay amount is equal to the current pay plus the current pay multiplied by the raise percentage.

Example: How Much is a 3 Percent Raise?

Let’s say you are making $20 per hour and receive a 3% pay raise. A 3% pay raise is a typical increase that employers use to help employees keep up with inflation and the increased cost of living.

Let’s input both of these numbers into the percentage pay raise formula to see what the new pay rate is.

new pay = $20 + ($20 × 3%)
new pay = $20 + $0.60
new pay = $20.60

After the pay raise, you would be making $20.60 per hour.

If instead, you were making $30 per hour, a 3% raise would increase your pay rate to $30.90 per hour.

Amount Pay Raise Formula

To calculate a raise given a fixed dollar amount increase, use the following formula:

new pay = current pay + raise by amount

Thus, the new pay is equal to the current pay plus the raise amount.

New Hourly Rate Formula

To calculate the raise as a percentage if you’ve been given a new rate, use the following formula:

raise percentage = new rate – old rate / old rate

The raise expressed as a percentage is equal to the new pay rate minus the old pay rate, divided by the old pay rate.

How to Calculate a New Annual Salary After a Pay Raise

You can calculate your new annual salary in three simple steps.

First, you need to calculate the new pay rate.

Then, calculate the weekly pay by multiplying the new pay rate by the number of hours worked in a week.

Finally, calculate the annual pay by multiplying the weekly pay by 52 (the number of weeks in a year).

You can also calculate the annual salary by multiplying the pay rates by 2,080, which is the total hours worked in a year, assuming a 40-hour workweek.

Building on the example above, let’s walk through these steps to calculate the new annual salary.
The pay rate increased from $20 to $20.60 per hour after a 3% pay raise.

If we assume a standard 40-hour workweek, that would be a weekly pay of 40 × $20.60 = $824.

The weekly pay before the raise was 40 × $20 = $800. To determine how many hours per day or per week you work, try using our hours calculator.

Before the pay raise, the annual pay was $800 × 52 = $41,600 (you can use an hourly to salary calculator to find this).

To calculate the new pay rate, multiply $20.60 × 2,080 = $42,848. These are exactly in line with what we calculated previously.

Therefore, if you earn $20 per hour and get a 3% raise, this will translate into a $1,248 annual pay increase.

If your raise is a percentage of your salary, then you can multiply your current salary by the percentage to find the raise amount. Then, add this amount to your current salary to find your new salary.

For example, let’s calculate the new salary after a 5% raise for an employee with a salary of $40,000.

$40,000 × 0.05 = $2,000

So, this employee’s raise is $2,000 per year. To find their new salary, add this to their current salary.

$40,000 + $2,000 = $42,000

This employee’s new salary will be $42,000 after a 5% raise.

You can follow these same steps to calculate your new monthly income after receiving a raise.

How to Calculate a Raise Amount After a Pay Increase

After a pay increase, the raise is calculated by subtracting the old annual pay from the new annual pay.

In the previous example, we saw an annual pay increase of $1,248 after a 3% raise assuming the worker earned $20 per hour with a 40-hour workweek. You can calculate this 3% raise by dividing the pay increase of $1,248 by the previous annual wages of $41,600.

raise percentage = $1,248 / $41,600 = 3%

You might also be interested in our salary to hourly converter.

Frequently Asked Questions

What is a typical annual pay raise?

A typical annual pay raise offered by many employers is 3%, which accounts for inflation and an increase in the overall cost of living. However, each employer differs and can offer various annual pay raises for various reasons.

How often should employees get a raise?

Many employers offer a pay raise annually, or once per year. However, employers can offer pay raises more or less frequently for various reasons, such as employee performance, promotions, job changes, or company performance.

Will you owe taxes if you get a raise?

Any cash compensation paid will be taxed, including a pay raise. It’s important to understand how much of your pay will be withheld in taxes. You can use the federal tax withholding calculator to estimate your taxes owed or consult with a certified public accountant.[1]

Overall, it’s important to understand how to calculate a pay raise so that you understand your overall annual income and tax implications.


  1. Internal Revenue Service, Tax Withholding Estimator,