Enter your initial pay and a percentage increase into the calculator below to determine your new pay rate.
- Future Value Calculator
- Depreciation Calculator
- Certificate of Deposit Calculator
- Hourly Pay Calculator
Pay Raise Formula
The following formula is used to calculate a pay raise.
NP = OP * (I/100+1)
- Where NP is the new pay rate
- OP is the original pay rate
- I is the percentage increase in pay
The original pay rate refers to the initial or starting wage agreed upon or designated for a specific job or employee.
The percentage increase in pay refers to the amount by which an individual's salary or wages have grown relative to its original value.
Pay Raise Definition
A pay raise is an increase in salary or wages received by an employee from their employer. It is important because it rewards employees for their hard work, dedication, and contributions to the company.
A pay raise also helps to motivate and retain talented employees, boosting morale and job satisfaction. Additionally, it can help employees keep up with inflation and improve their financial well-being.
How to calculate a pay raise?
How to calculate a pay raise
- First, determine your original pay
Use the hourly rate your company gives you or your salaried rate.
- Next, determine the pay increase
This should be a percentage increase.
- Calculate your new pay rate
Enter the information from steps 1 & 2 into the calculator to determine your new pay rate.
FAQ
How often should employees receive a pay raise?
Typically, employees might expect to receive a pay raise annually, but this can vary based on the employer's policies, the employee's performance, and the overall financial health of the company.
What factors can influence the percentage increase of a pay raise?
Several factors can influence the percentage increase, including the employee's performance, the company's pay scale policies, inflation rates, and the current market salary rates for similar positions.
Is there a difference between a pay raise and a bonus?
Yes, a pay raise is a permanent increase in the salary or wages of an employee, whereas a bonus is a one-time payment given for various reasons, such as performance, company profitability, or as a holiday gift.
Can negotiating for a higher pay raise affect my job?
Negotiating for a higher pay raise can be part of a healthy professional relationship, provided it is done respectfully and based on meritorious reasons. Being well-prepared and having a clear understanding of your value to the company can make such negotiations more fruitful.
