Enter your initial pay and a percentage increase into the calculator below to determine your new pay rate.

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

  1. First, determine your original pay

    Use the hourly rate your company gives you or your salaried rate.

  2. Next, determine the pay increase

    This should be a percentage increase.

  3. Calculate your new pay rate

    Enter the information from steps 1 & 2 into the calculator to determine your new pay rate.

FAQ

What is a pay raise?

A pay raise is an increase in wages for your job that arises from good performance or a change in responsibilities.

pay raise calculator
pay raise formula