To calculate a pay raise percentage from your old and new salary, use this formula: raise percent = (New salary − Old salary) ÷ Old salary × 100. If your pay went from $60,000 to $63,000, that is ($63,000 − $60,000) ÷ $60,000 × 100 = 5%. To go the other direction and apply a known percentage, use New salary = Old salary × (1 + r), where r is the raise written as a decimal (5% becomes 0.05). These two formulas are mirror images, and once you know both you can answer almost any raise question in seconds. You can also skip the math with our pay raise calculator.
This guide focuses on the percentage side of a raise: how to find the percent when you only know your old and new pay (the reverse calculation), and how to apply a percent to find your new pay (the forward calculation). For the broader dollar-by-dollar walkthrough, including hourly and weekly conversions, see our companion guide on how to calculate a pay raise.
The two formulas you actually need
Every pay raise percentage question is really one of two problems. Either you know the percent and want the new dollar figure, or you know the dollar figures and want the percent. Here are both, side by side.
| Direction | Formula | Use it when |
|---|---|---|
| Forward (apply a percent) | New = Old × (1 + r) | "I got a 4% raise. What's my new salary?" |
| Reverse (find the percent) | r = (New − Old) ÷ Old × 100 | "My pay went from $60k to $63k. What percent is that?" |
The letter r is the raise rate written as a decimal. A 4% raise is r = 0.04, so (1 + r) = 1.04. Multiplying your old salary by 1.04 gives the new salary in one step. This is the same logic behind any percentage change calculator, just applied to your paycheck.
How to calculate pay raise percentage from old and new salary (reverse)
This is the most common real-world question: what percent is my raise? You already know both numbers, you just need the percent. Subtract the old salary from the new one, divide by the old salary, then multiply by 100.
Worked example. Say you earned $52,000 and your offer letter bumps you to $55,640.
- Find the dollar increase: $55,640 − $52,000 = $3,640
- Divide by the old salary: $3,640 ÷ $52,000 = 0.07
- Multiply by 100: 0.07 × 100 = 7%
That is a 7% raise. The detail people get wrong: you divide by the old salary, not the new one. Dividing the same $3,640 by $55,640 gives about 6.54%, which understates the raise. The percentage is always measured against where you started.
How to calculate a pay raise percent forward (apply a percent)
Now the other direction. Your manager says "you're getting a 3.5% increase" and you want the actual dollar figure. Convert the percent to a decimal and multiply.
Worked example. You make $68,000 and receive a 3.5% raise.
- Convert the percent to a decimal: 3.5% ÷ 100 = 0.035
- Add 1 to get the growth factor: 1 + 0.035 = 1.035
- Multiply your old salary: $68,000 × 1.035 = $70,380
Your raise is worth $2,380 a year. If you only want the increase amount and not the new total, multiply the old salary by the decimal alone: $68,000 × 0.035 = $2,380. Both routes land in the same place.
A $60,000 salary at common raise percentages
Because $60,000 is a clean round number, it makes a useful reference point. Here is what a $60,000 salary becomes at the raise sizes you'll most often see, along with the extra annual dollars.
| Raise percent | Growth factor (1 + r) | New salary | Extra per year |
|---|---|---|---|
| 2% | 1.02 | $61,200 | +$1,200 |
| 3% | 1.03 | $61,800 | +$1,800 |
| 4% | 1.04 | $62,400 | +$2,400 |
| 5% | 1.05 | $63,000 | +$3,000 |
To scale this to your own pay, multiply your salary by the growth factor. A 3% raise on $90,000 is $90,000 × 1.03 = $92,700. According to wage data tracked by the U.S. Bureau of Labor Statistics, typical annual pay increases in recent years have clustered in the low-to-mid single digits, so the rows above cover the range most employees realistically see.
Why two raises don't simply add up (compounding)
Here is the trap that surprises almost everyone. If you get a 3% raise this year and another 3% next year, your total increase is not 6%. It's 6.09%. The second raise is applied to a salary that already includes the first, so the percentages compound rather than add.
Worked example. Start at $60,000.
- After raise one: $60,000 × 1.03 = $61,800
- After raise two: $61,800 × 1.03 = $63,654
Your salary climbed by $3,654, and $3,654 ÷ $60,000 = 6.09%. The shortcut is to multiply the growth factors: 1.03 × 1.03 = 1.0609, a 6.09% total increase. The gap looks tiny over two years, but it widens over a career. Three 3% raises stacked give 1.03 × 1.03 × 1.03 = 1.092727, or about 9.27% total, not 9%. The trick works for mismatched raises too: a 4% raise followed by a 3% raise is 1.04 × 1.03 = 1.0712, roughly 7.12% combined, not 7%. Always multiply growth factors; never add the percentages.
Blending a mid-year raise
Raises rarely land on January 1. If your increase takes effect partway through the year, your annual earnings reflect a blend of the old rate and the new rate. To find what you actually earn for the calendar year, weight each salary by the share of the year it applied.
Worked example. You earn $60,000, and on July 1 you get a 5% raise to $63,000. That's six months at the old rate and six months at the new rate.
- First half: $60,000 × (6 ÷ 12) = $30,000
- Second half: $63,000 × (6 ÷ 12) = $31,500
- Blended yearly earnings: $30,000 + $31,500 = $61,500
Even though your new salary is $63,000, your gross for that specific year reflects $61,500, an effective 2.5% bump for the calendar year. Your full 5% only shows up in the first complete year after the raise. If the raise hit on October 1 (nine months old, three months new), you'd weight by 9/12 and 3/12 instead, landing at $60,750 for the year.
Calculating a percentage raise on hourly pay
The same forward formula works whether you're salaried or hourly. Convert the percent to a growth factor and multiply your hourly rate. At $25.00 an hour, a 4% raise is $25.00 × 1.04 = $26.00 an hour. To see the annual difference, multiply each rate by the standard 2,080 full-time hours in a year (40 hours × 52 weeks): $25.00 × 2,080 = $52,000 versus $26.00 × 2,080 = $54,080, a $2,080 raise. If you want to convert a new salary the other way, our salary to hourly calculator does it instantly using that same 2,080-hour basis, which is handy when you're comparing an hourly offer against a salaried one.
Don't confuse the raise percent with take-home pay
A raise percentage describes your gross pay, the figure before taxes and deductions. Your paycheck doesn't grow by the same percentage, because part of any raise goes to federal and state income tax, Social Security, Medicare, and often higher 401(k) or benefit contributions. A 5% gross raise might feel more like a 3.5% to 4% bump in your actual deposit, depending on your bracket and state.
The percentage math in this guide is still correct and useful, it just answers a different question than "how much more will I see in my bank account." To estimate the after-tax side, run the new number through a take-home pay calculator. One more reality check worth doing: compare your raise to inflation. A 4% raise during a year of roughly 3% inflation is only about a 1% gain in real buying power, so the headline percent and the lived-experience percent can drift apart.
Quick reference: common questions in formula form
| You want to know | Do this |
|---|---|
| The percent, from old and new pay | (New − Old) ÷ Old × 100 |
| The new salary, from a percent | Old × (1 + r) |
| Just the dollar increase | Old × r |
| Two raises combined | Multiply the growth factors: (1 + r₁) × (1 + r₂) |
| A mid-year blended salary | Old × (months old ÷ 12) + New × (months new ÷ 12) |
Common mistakes to avoid
- Dividing by the new salary. The percent is always measured against the old salary, the starting point.
- Adding raise percentages. Two 3% raises make 6.09%, not 6%. Multiply growth factors instead.
- Forgetting to convert to a decimal. Multiply by 1.04 for a 4% raise, not by 4 or 1.4.
- Mixing up gross and net. The raise percent applies to pre-tax pay, so your take-home rises by less.
- Ignoring mid-year timing. A raise effective in July doesn't deliver its full percent until the next full year.
Once these two formulas click, the rest is just plugging in numbers. When you'd rather not do it by hand, our pay raise calculator handles the forward and reverse math instantly, shows the dollar difference, and lets you test different raise sizes side by side, so you can see exactly what each percentage is worth before your next review or job offer.
Try it yourself
Run your own numbers in the free Pay Raise Calculator — instant, private, no sign-up.
Open the Pay Raise Calculator →Frequently asked questions
- How do I calculate my pay raise percentage from my old and new salary?
- Subtract your old salary from your new salary, divide that difference by your old salary, then multiply by 100. Going from $60,000 to $63,000 is ($63,000 - $60,000) / $60,000 x 100 = 5%. The most important rule is to always divide by the old (starting) salary, not the new one, or you'll understate the raise. The denominator is your original pay.
- What percent is my raise if I went from $50,000 to $54,000?
- That is an 8% raise. Take the increase, $54,000 - $50,000 = $4,000, divide it by the old salary of $50,000 to get 0.08, then multiply by 100 to get 8%. The same method works for any pair of numbers: (new - old) / old x 100. Dividing by the old salary keeps the percentage measured against where you started.
- How do I find my new salary if I get a 4% raise?
- Convert 4% to the decimal 0.04, add 1 to get 1.04, then multiply your current salary by 1.04. On $60,000 that's $60,000 x 1.04 = $62,400, a $2,400 increase. To get just the raise amount without the new total, multiply by the decimal alone: $60,000 x 0.04 = $2,400. Both approaches give the same dollar figure.
- Is two 3% raises the same as a 6% raise?
- No, two 3% raises equal a 6.09% total increase, not 6%. The second raise is applied to a salary that already includes the first, so percentages compound instead of adding. Multiply the growth factors: 1.03 x 1.03 = 1.0609. On $60,000 you'd reach $63,654, which is $3,654 more, or 6.09% above where you started.
- Why should I divide by the old salary and not the new one?
- Because a raise percentage measures growth from your starting point, the old salary is the correct base. If your pay rose $3,000 on a $60,000 salary, dividing by $60,000 gives the true 5% raise. Dividing the same $3,000 by the new $63,000 gives only about 4.76%, which understates what you gained. The denominator is always the original figure.
- How does a mid-year raise affect my yearly earnings?
- A mid-year raise blends your old and new rates for that calendar year. Weight each salary by the share of the year it applied. If you earn $60,000 and get bumped to $63,000 on July 1, you earn $30,000 for the first half plus $31,500 for the second, totaling $61,500. Your full new salary only shows up in the next complete year.
- Does my take-home pay go up by the full raise percentage?
- No, your take-home rises by less than the raise percentage because a raise is measured on gross (pre-tax) pay. Part of it goes to federal and state income tax, Social Security, Medicare, and any benefit or 401(k) deductions. A 5% gross raise often feels closer to 3.5% to 4% in your actual deposit. Run the new figure through a take-home pay calculator to estimate the after-tax amount.
- What is the formula for calculating a salary increase percentage?
- The salary increase percentage formula is (New salary - Old salary) / Old salary x 100. This reverse formula tells you the percent when you already know both dollar amounts. The forward version, New = Old x (1 + r), goes the other way to find the new salary from a known percent. These two formulas are mirror images and cover nearly every raise calculation.
- How do I calculate the dollar amount of a percentage raise?
- Multiply your current salary by the raise expressed as a decimal. For a 3.5% raise on $68,000, multiply $68,000 x 0.035 = $2,380, the extra annual pay. To get the new total instead, multiply by 1.035: $68,000 x 1.035 = $70,380. Convert the percent to a decimal first by dividing it by 100.
- How do I apply a percentage raise to an hourly wage?
- Convert the percent to a growth factor and multiply your hourly rate. A 4% raise on $25.00 an hour is $25.00 x 1.04 = $26.00. To see the annual difference, multiply each rate by 2,080 full-time hours (40 hours x 52 weeks): $25.00 gives $52,000 and $26.00 gives $54,080, a $2,080 raise. The forward formula works identically for hourly and salaried pay.
Related guides
How to calculate a pay raise: percentage, hourly, and annual examples · Salary to hourly conversion: the formula, the math, and how to compare jobs fairly · How to Calculate Hourly Rate From Salary: The Step-by-Step Formula · Salary to Hourly Conversion Chart: $30k–$150k Reference Table