How it works
A raise percentage is the increase divided by your old pay. A 4% raise on $60,000 adds $2,400 a year, bringing pay to $62,400.
To judge whether a raise improves your buying power, compare it with inflation. The real raise is (1 + raise) ÷ (1 + inflation) − 1, so a 4% raise during 3% inflation is about a 0.97% real gain.
Formula
New pay = current × (1 + raise %); raise % = (new ÷ current − 1) × 100
Questions people ask
What is a typical annual raise?
In the US, average merit raises have typically run about 3–4% in recent years. Promotions and job changes often bring 10% or more.
What is a cost-of-living adjustment?
A COLA is a raise intended to keep pay level with inflation, often tied to the Consumer Price Index. It maintains buying power rather than increasing it.
How much of my raise will I take home?
Less than the gross increase, because it is taxed at your marginal rate plus FICA. The take-home pay calculator can estimate the after-tax difference.