How to Calculate a Raise Percentage: The Formula, Worked Out

The core formula

There are two directions to this math, and both use the same idea. To turn a raise percent into dollars: new salary = old salary x (1 + raise as a decimal). To turn a salary change into a percent: raise percent = (new salary - old salary) / old salary x 100.

Example: a 4 percent raise on $65,000. Convert 4 percent to 0.04, then 65,000 x 1.04 = $67,600. The raise itself is 65,000 x 0.04 = $2,600 a year. That is the whole operation. Everything below is just this formula applied to the situations people actually run into.

Worked example: dollars per paycheck

Percentages sound abstract until you turn them into paycheck dollars. Take a 3 percent raise on $60,000. The annual raise is 60,000 x 0.03 = $1,800. Divide by your pay frequency to see what it means per check:

• Weekly (52 checks): $1,800 / 52 = $34.62 per paycheck
• Biweekly (26 checks): $1,800 / 26 = $69.23 per paycheck
• Monthly (12 checks): $1,800 / 12 = $150.00 per paycheck

All figures are gross pay, before taxes and deductions. This per-paycheck view is the one that matters for budgeting: it tells you whether the raise moves your daily life or just your W-2.

Working backward: find the percent from two salaries

Sometimes you get the offer as a dollar figure, not a percent. If your salary is $68,000 and you are offered $72,000, subtract to get the raise ($4,000), divide by the old salary, and multiply by 100: (72,000 - 68,000) / 68,000 x 100 = 5.88 percent, or about 5.9 percent. A 5.9 percent jump beats the typical 3 to 5 percent merit range, which is useful context for deciding how to respond.

Another common case: your salary is $65,000 and the new offer is $70,000. The raise is $5,000, and 5,000 / 65,000 x 100 = 7.69 percent. Knowing the percent lets you compare the offer against the average raise this year instead of reacting to the dollar figure alone.

Hourly raise math

Hourly workers get the same formula with different units. A 3 percent raise on a $25.00 hourly rate adds 25 x 0.03 = $0.75 per hour, taking you to $25.75. Over a full 2,080-hour work year, that $0.75 is worth 0.75 x 2,080 = $1,560 a year. A raise that looks like pocket change per hour is still real money annually, so always multiply it out.

Percent versus percentage points

Do not confuse these. If your raise grows from 3 percent to 5 percent, it grew by 2 percentage points, but the raise itself grew by 66.7 percent (2 / 3 x 100). Employers sometimes say "your raise doubled" when it went from 2 percent to 4 percent, which is technically true in percentage-point terms but still only a 2-point move. Judge offers on the dollar amount and the real purchasing-power change, not on how the percent sounds. See how to tell whether a raise is real after inflation.

Skip the hand math whenever you want: the free pay raise calculator runs both directions instantly and shows the new salary, the raise in dollars, the new hourly rate, and gross pay per paycheck.