Pay Raise Calculator

Your raise, in one line.

A 5% raise on $60,000 makes your new annual pay $63,000. That is a $3,000 annual raise, or about $250 more per month before taxes.

A typical merit raise is about 3% to 4%. If cost of living inflation is near 3%, a 5% salary increase is usually above average because your buying power grows.

To calculate a pay raise percentage, subtract your old pay from your new pay. Divide that number by your old pay, then multiply by 100.

To calculate new pay from a percentage increase, multiply your current pay by 1 plus the raise percentage divided by 100. The raise calculator does both directions.

How to calculate a pay raise.

Use three steps. Enter your current pay, enter the raise as a percent or new salary amount, and read the result.

For hourly pay, the tool annualizes wages at 2,080 hours, or 40 hours per week for 52 weeks. That makes hourly, weekly, monthly, and annual pay easier to compare. The result shows your new annual salary, raise amount, raise percentage, per-paycheck change, and real raise after inflation.

What counts as a good raise?

A good raise beats inflation. If your annual raise only matches the cost of living, your paycheck rises but your buying power stays about the same.

Below about 3% is usually weak. A 3% to 4% raise is a normal merit increase. A 5% raise or more is stronger and may reflect a promotion, market adjustment, or successful salary negotiations.

• Below ~3% — your raise is smaller than inflation, so in real terms it's a quiet pay cut. Worth a conversation.
• 3–4% — a standard merit raise. You're keeping pace and roughly holding your buying power.
• 5% or more — above average. You're outpacing inflation and growing real income, common with promotions, market adjustments, or strong performance.

The calculator subtracts inflation from your raise percentage to show the real raise. For example, a 4% raise during 3% inflation is only about a 1% real gain.

Overtime & time and a half.

Switch to Overtime to estimate weekly gross pay from regular hours, overtime hours, and double-time hours. This helps hourly workers compare regular pay, overtime pay, and take-home pay before taxes.

Under the federal Fair Labor Standards Act (FLSA), most non-exempt employees must earn at least time and a half for hours worked over 40 in a workweek. Time and a half means 1.5 times the regular hourly rate. Some employers, contracts, or state rules may pay double time, and the calculator supports that optional second tier.

• Regular pay = hourly rate × regular hours.
• Overtime pay = hourly rate × 1.5 × overtime hours.
• Double-time pay = hourly rate × 2 × double-time hours.
• Weekly gross = regular pay + overtime pay + double-time pay.

Weekly gross equals regular pay plus overtime pay plus double-time pay. For federal overtime rules, see https://www.dol.gov/agencies/whd/overtime.

How severance pay is structured.

Switch to Severance to estimate a payout from annual salary, years of service, and your employer's weeks-per-year policy. The calculator also gives a tax-aware net estimate.

There is no single legal severance formula across most of the United States. Severance usually comes from a contract, company policy, or negotiation. A common structure is one to two weeks of pay for every year of service:

• Severance weeks = years of service × weeks of pay per year.
• Estimated severance = weekly pay × severance weeks, plus any lump-sum bonus.
• Take-home = severance minus withholding. Severance is usually taxed as supplemental wages, often withheld around 22% federally plus FICA and any state tax — so the net is meaningfully below the gross.

Severance is often taxed as supplemental wages, so federal withholding, FICA, and state tax can make net pay much lower than gross pay. For supplemental wage withholding, see IRS Publication 15: https://www.irs.gov/publications/p15.

Worked examples you can copy.

Here are five common calculations. Plug the same inputs into the pay raise calculator to see the numbers update live.

1. What is a 3% raise on $50,000?

$50,000 times 1.03 equals $51,500. That is $1,500 more per year, or about $125 per month before taxes. At about 3% inflation, this is close to a break-even annual raise. It keeps up with the cost of living but does not add much buying power.

2. I went from $25 to $27 an hour. What percent raise is that?

Subtract $25 from $27, divide by $25, and multiply by 100. The raise percentage is 8%. Annualized at 2,080 hours, that hourly raise is about $4,160 more per year. That is above a typical merit increase.

3. What is my overtime if I work 8 OT hours at $18 an hour?

Regular 40 hours is $720. Overtime at time and a half is $27 per hour, so 8 overtime hours add $216 and weekly gross equals $936.

4. Double time on a holiday

At $22 an hour, 40 regular hours is $880. Six holiday hours at double time is $44 times 6, or $264, for a $1,144 weekly gross.

5. Severance after 8 years on $80,000

$80,000 divided by 52 is about $1,538 per week. At 2 weeks per year for 8 years, severance is 16 weeks, or about $24,615 gross and about $19,200 after a 22% withholding estimate.

Common mistakes with raises & pay.

Using monthly pay when you need annual pay is another trap. Weekly and monthly numbers are useful, but salary negotiations usually focus on annual salary, annual pay, and annual raise.

Pay raise — FAQ.

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