Enter the current wages ($) and the inflation rate (%) into the Real Wage Rate Calculator. The calculator will evaluate the Real Wage Rate. 

Real Wage Rate Formula

The following two example problems outline the steps and information needed to calculate the Real Wage Rate.

RWR = CW / (1+IR/100)
  • Where RWR is the Real Wage Rate ($)
  • CW is the current wages ($) 
  • IR is the inflation rate (%) 

To calculate the real wage rate, divide the current wage rate by the result of 1 plus the inflation rate.

How to Calculate Real Wage Rate?

The following example problems outline how to calculate Real Wage Rate.

Example Problem #1:

  1. First, determine the current wages ($).
    • The current wages ($) is given as: 50,000.
  2. Next, determine the inflation rate (%).
    • The inflation rate (%) is provided as: 5.
  3. Finally, calculate the Real Wage Rate using the equation above: 

RWR = CW / (1+IR/100)

The values provided above are inserted into the equation below and computed.

RWR = 50,000 / (1+5/100) = 47,619.05 ($)

Example Problem #2: 

For this problem, the variables required are provided below:

current wages ($) = 60,000

inflation rate (%) = 3

Test your knowledge using the equation and check your answer with the calculator..

RWR = CW / (1+IR/100) = ?