How to Calculate a Raise in Percentage (With Examples)

A raise sounds simple until you try to compare two offers or work out whether a new salary is actually better. A 3 percent raise on one salary and a 2 dollar hourly bump on another are hard to compare until both are expressed the same way. Turning a raise into a percentage gives you a single number you can compare with inflation, with a competing offer, and with what colleagues in similar roles are getting. You can check any of these calculations with our percentage calculator.

Quick answer: Subtract your old pay from your new pay, divide by your old pay, and multiply by 100. For example, a move from 25 dollars an hour to 27 dollars an hour is a 2 dollar increase, and 2 divided by 25 times 100 equals an 8 percent raise. The same formula works for hourly pay and annual salary.

The raise percentage formula, step by step

The formula is: (New pay minus Old pay) divided by Old pay, multiplied by 100. Step one is finding the difference between the two pay rates. Step two is dividing that difference by the old rate, not the new one — this is the mistake that most often produces a wrong answer. Step three is multiplying by 100 to turn the decimal into a percentage. Keep both pay rates in the same units: compare hourly with hourly, or annual with annual, before you start.

How do you calculate a raise for hourly pay?

Hourly raises are often quoted in dollars, which hides the percentage. Take a worker moving from 22 dollars an hour to 23.50 dollars an hour. The increase is 1.50 dollars, and 1.50 divided by 22 times 100 equals 6.8 percent. At 40 hours a week, that 1.50 dollars is worth 60 dollars a week, or about 3,120 dollars over a full year — a useful way to judge whether a small hourly bump is worth celebrating or worth negotiating further.

Salaried raises and what lands in your paycheck

The same formula applies to salaries. A salary rising from 62,000 dollars to 65,100 dollars is an increase of 3,100 dollars, and 3,100 divided by 62,000 times 100 equals exactly 5 percent. Remember that a gross raise is not the same as extra take-home pay: income tax, Social Security and Medicare deductions, and any retirement contribution taken as a percentage of pay will all rise slightly too, so the net increase in each paycheck will be smaller than the gross percentage suggests.

Is your raise actually a pay cut? Check it against inflation

A raise only improves your purchasing power if it beats inflation. If prices rose 3.4 percent over the year and your raise was 3 percent, your real pay fell by roughly 0.4 percent even though the number on your paycheck went up. Before accepting an offer, compare the raise percentage with the latest US inflation rate and with typical raises in your industry. A raise below inflation is a reasonable, evidence-based reason to ask for more, and framing it that way keeps the conversation factual rather than emotional.

Common raise scenarios, worked out

Old pay	Raise	New pay
58,000 dollars a year	3 percent (1,740 dollars)	59,740 dollars a year
22 dollars an hour	6.8 percent (1.50 dollars)	23.50 dollars an hour
62,000 dollars a year	5 percent (3,100 dollars)	65,100 dollars a year

Notice how the same percentage means very different dollar amounts at different pay levels. That is why comparing percentages, not just dollars, matters when you weigh two jobs or two offers.

Frequently asked questions

A raise percentage takes less than a minute to calculate and turns a vague-sounding offer into a number you can compare, negotiate, and plan around. Work it out before you accept, check it against inflation, and you will know exactly what the new number is really worth.