1. What is Pay Raise Percentage?

The Pay Raise Percentage measures the increase in salary from an old amount to a new amount, expressed as a percentage of the original salary. It helps employees understand the magnitude of their salary increase in relative terms.

2. How Does the Calculator Work?

The calculator uses the pay raise percentage formula:

Where:

• New Salary — The increased salary amount
• Old Salary — The original salary before the raise

Explanation: The formula calculates the difference between the new and old salary, divides it by the old salary to get the relative increase, then multiplies by 100 to convert to percentage.

3. Importance of Pay Raise Calculation

Details: Understanding your pay raise percentage helps in financial planning, comparing job offers, and negotiating future salaries. It provides a clearer picture of salary growth than just looking at dollar amounts.

4. Using the Calculator

Tips: Enter both salary amounts in the same currency (preferably before taxes). The old salary should be your previous amount, and the new salary your increased amount. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Should I use gross or net salary for calculations?
A: Typically use gross (pre-tax) salary for these calculations, as tax rates may change independently of your raise.

Q2: What's considered a good pay raise percentage?
A: This varies by industry and location, but typically 3-5% is considered a standard annual raise, while 10%+ is considered significant.

Q3: How does this differ from cost of living adjustments?
A: A pure cost of living adjustment aims to match inflation, while a pay raise represents an increase in real purchasing power.

Q4: Can the percentage be negative?
A: Yes, if the new salary is lower than the old salary, the result will be negative, indicating a pay cut.

Q5: How should I account for bonuses in this calculation?
A: For accurate comparisons, either include bonuses in both salary amounts or exclude them from both.