Salary Increase Calculator

A pay rise feels like good news, and often it is — but the percentage you are told and the percentage you actually gain are two different things once inflation is taken into account. A three per cent raise in a year when prices rose three per cent leaves you exactly where you started, working the same job for the same real money.

The right way to judge a raise is in real terms. Take the percentage increase, subtract roughly the inflation rate, and what remains is the genuine improvement in what your pay can buy. If prices rose faster than your salary, the "raise" is really a small cut, even though the number on your payslip went up.

Time your comparison carefully. Raises arrive annually in many jobs, while inflation runs continuously, so the base you are measuring against needs to be the salary a year ago. Someone who has not had a rise in three years may be far behind even if this year's figure looks positive.

Beyond inflation, it helps to compare the rise against two other things: what the same job pays elsewhere, and what internal peers earn. A raise that beats inflation but lags the market still leaves money on the table, and a promotion-adjacent rise that does not match the extra responsibility is a pay cut in disguise.

The month-to-month figure is also worth a look. A few thousand a year spread across twelve months, minus whatever higher-rate tax applies, is often small enough to disappear into everyday spending — which is why taking part of a raise directly into savings or a pension is the surest way to keep it.

This tool gives an estimate of the arithmetic involved. It is not tax or financial advice; actual take-home depends on your tax situation.

This calculator returns estimates for general information only. It is not financial, investment, tax or legal advice, and it cannot replace guidance from a qualified professional who knows your circumstances. Figures such as loan payments, investment growth and retirement projections are simplified models based on the inputs and assumptions you provide, not guarantees of future results.