Inflation Calculator

How inflation affects your salary

Inflation is the rate at which prices rise over time, which means the same salary buys less each year. The Consumer Price Index (CPI) tracks the average price of a basket of goods and services, so comparing CPI between two years tells you how much buying power your money has gained or lost.

Value in target year = amount × (CPI target ÷ CPI base)

A pay raise only makes you better off if it outpaces inflation. If prices rise 3% and you get a 2% raise, your real income has actually fallen. Use the pay raise calculator to work out your new salary, then come back here to see if it beats inflation.

Inflation calculator FAQ

How does the inflation calculator work?

It uses the US Consumer Price Index (CPI-U) annual averages from the Bureau of Labor Statistics. The value in the target year equals your amount multiplied by the ratio of the two years' CPI, which shows how prices and buying power have changed.

How do I know if my raise beats inflation?

Compare your raise percentage to the inflation rate. If your raise is higher, your buying power grows; if it's lower, you effectively earn less. The 'Raise vs inflation' tab shows your real change in buying power after inflation.

What is purchasing power?

Purchasing power is how much a fixed amount of money can actually buy. As prices rise, the same dollar buys less, so $1 from an earlier year is worth only a fraction of a dollar in today's terms.

What inflation data does this use?

It uses CPI-U (Consumer Price Index for All Urban Consumers) annual averages, the most widely cited US inflation measure, going back to 1913. Figures are estimates for educational use only.