Salary Increase Calculator

The average salary increase in the US is 3–5% per year for merit raises. A cost-of-living adjustment (COLA) typically tracks inflation — around 2–4% in recent years. A promotion-based raise is usually 10–20%. If your raise is below the current inflation rate, your real purchasing power is declining even if your nominal salary went up.

Divide the increase amount by your original salary and multiply by 100. Formula: (New Salary − Old Salary) ÷ Old Salary × 100. For example, going from $60,000 to $63,000 is ($3,000 ÷ $60,000) × 100 = 5% increase.

The US uses a progressive tax system — only the income above each bracket threshold is taxed at the higher rate, not your full salary. So a raise rarely causes you to "lose money" by moving into a higher bracket. However, a higher salary may slightly increase your effective tax rate. Use our state-specific paycheck calculators to see your new net pay.

A merit raise is performance-based — awarded for individual contribution or promotion. A cost-of-living adjustment (COLA) is designed to maintain purchasing power as prices rise and is typically tied to the Consumer Price Index (CPI). Many employers give COLA increases automatically each year and separate merit raises on top of that.

Research the market rate for your role using sources like BLS Occupational Employment Statistics, LinkedIn Salary, or Glassdoor. If you're below market, a 10–20% ask is reasonable. If you're at market, 5–8% for strong performance is typical. Always anchor to data — your value to the business plus market comparables — rather than personal financial need.

Divide the annual increase by 26 (bi-weekly pay periods). For example, a $5,000 annual raise equals $5,000 ÷ 26 = $192.31 more per paycheck before taxes. This calculator shows the exact per-paycheck impact across all common pay frequencies.

A nominal increase is the raw dollar or percentage raise on paper. A real increase is your nominal raise minus inflation. If you received a 3% raise but inflation was 4%, your real salary actually decreased by 1% — your purchasing power went down even though your paycheck went up.

There is no legal limit in the US on how often an employer can raise salaries. Most companies review compensation annually, though some do mid-year reviews for high performers or during promotions. Raises are almost always at the employer's discretion unless governed by a union contract or employment agreement.