Pay Rise Calculator
Turn a percentage raise into the new salary and the monthly difference.
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Formula
How the calculation works
A percentage raise is not a fixed amount, which is the whole reason it is quoted as a percentage. Eight per cent of 42,000 is 3,360, but eight per cent of 60,000 is 4,800. The same headline figure gives two people very different raises, and the one on the higher salary gains more from the same negotiation.
That compounding effect is why a small percentage gap widens over a career. Two colleagues starting 2,000 apart, each getting the same percentage every year, do not stay 2,000 apart -- the gap grows with the salary. This is also why a raise expressed as a percentage is worth more than the same amount offered as a flat sum to anyone already earning above a certain level.
Dividing the annual rise by twelve gives the monthly change, which is the number people actually feel. A 3,360 annual rise is 280 a month, and against a monthly budget that is the figure that matters, not the annual total. Tax is not taken off here: the rise is gross, and what reaches your account depends on your bracket.
Common mistakes
- Adding the percentage to the salary as a number. A 42,000 salary with an 8% raise becomes 45,360, not 42,008.
- Reading the annual rise as the monthly one. Dividing 3,360 by twelve gives 280, and that is what changes in your bank account each month.
- Assuming the raise is what you keep. It is gross, and tax comes off it at your marginal rate.
When to use it
- Use it to check an offer letter: confirm the new salary matches the percentage you were told, and see what it means per month.
- It answers the gross change only. If you need the take-home after tax, that is a different calculation and this one will overstate what you keep.
Worked example
A 42,000 salary raised by 8% becomes 45,360, which is 280 more a month.
Common questions
How do I convert a percentage raise to an amount?
Divide the salary by 100 and multiply by the percentage: 8% of 42,000 is 42,000 ÷ 100 × 8 = 3,360.
What is the raise per month?
Divide the yearly figure by twelve: 3,360 ÷ 12 = 280 a month.
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