How to Calculate a Pay Raise: Formulas & Chart
To calculate a pay raise, multiply your current salary by the raise percentage divided by 100: a 5% raise on $60,000 adds $3,000, for a new salary of $63,000. To find the percentage from a dollar raise, divide the raise by your current salary and multiply by 100.
Whether you're negotiating, comparing an offer or reviewing your annual increase, translate the raise into real numbers: your new salary, the yearly increase, the extra per paycheck — and how much of it you actually keep after tax.
Formula 1: percentage raise to new salary
A 5% raise on $60,000 adds $3,000, taking you to $63,000. Spread over 26 bi-weekly paychecks, that's about $115 more per pay period before tax, or $250 more per month.
Formula 2: dollar raise to percentage
If your salary goes from $72,000 to $75,600, the raise is $3,600. Divide $3,600 by $72,000 and multiply by 100: a 5% raise. Use this to compare a dollar offer against inflation or the typical 3–4% annual merit increase.
Calculating a raise on an hourly wage
The same formulas work per hour. Going from $25 to $27 an hour is a $2 raise: $2 ÷ $25 × 100 = 8%. Multiply the hourly gain by your yearly hours to see the annual value — at a standard 2,080 hours (40 hours × 52 weeks), $2/hour is worth $4,160 a year before tax.
2026 pay raise chart: annual gain and per-paycheck increase
Gross annual increase, with the extra amount per bi-weekly paycheck (26 per year) in brackets:
| Current salary | 3% raise | 5% raise | 8% raise | 10% raise |
|---|---|---|---|---|
| $40,000 | +$1,200 ($46/paycheck) | +$2,000 ($77/paycheck) | +$3,200 ($123/paycheck) | +$4,000 ($154/paycheck) |
| $60,000 | +$1,800 ($69/paycheck) | +$3,000 ($115/paycheck) | +$4,800 ($185/paycheck) | +$6,000 ($231/paycheck) |
| $80,000 | +$2,400 ($92/paycheck) | +$4,000 ($154/paycheck) | +$6,400 ($246/paycheck) | +$8,000 ($308/paycheck) |
| $100,000 | +$3,000 ($115/paycheck) | +$5,000 ($192/paycheck) | +$8,000 ($308/paycheck) | +$10,000 ($385/paycheck) |
| $120,000 | +$3,600 ($138/paycheck) | +$6,000 ($231/paycheck) | +$9,600 ($369/paycheck) | +$12,000 ($462/paycheck) |
Why your take-home gain is smaller
A raise is taxed at your marginal rate — the rate on your last dollars of income — not your average rate. For a single filer in the 22% federal bracket, each extra dollar loses 22% federal tax plus 7.65% FICA, and state income tax on top (about 0–10% depending on your state).
Example: a $3,000 raise for a single filer earning $60,000 in a state with a 5% income tax loses roughly 34.65% to tax, leaving about $1,960 extra per year — around $75 more per bi-weekly paycheck rather than $115. A raise never lowers your take-home pay: only the dollars above a bracket threshold are taxed at the higher rate.
Run your own numbers
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Open the calculatorFrequently asked questions
How do I calculate a percentage pay raise?
Multiply your current salary by the raise percentage divided by 100, then add it on. A 5% raise on $60,000 is $3,000, giving a new salary of $63,000.
How do I convert a dollar raise into a percentage?
Divide the raise amount by your current salary and multiply by 100. A $3,000 raise on $60,000 is a 5% increase.
How much is a $2 an hour raise per year?
At a full-time 2,080 hours a year, a $2 hourly raise adds $4,160 before tax. For part-time work, multiply $2 by your actual yearly hours.
Can a raise push me into a higher tax bracket and lower my pay?
No. US income tax is progressive, so only the income above a bracket threshold is taxed at the higher rate. A raise always increases take-home pay, just by less than the gross amount.