A salary raise calculator shows your true gain after federal and state taxes and inflation. A 5% raise sounds great — but after a 22% federal tax, 5% state tax, and 3% inflation, your real purchasing power gain is considerably smaller. This tool does the math.
Your Raise Details
Your marginal rate — the rate on your last dollars of income
New Annual Salary
Gross Increase
Where Your Raise Goes
Enter your salary details and click Calculate
How to Evaluate Your Salary Raise
The salary raise calculator reveals the true value of a raise by accounting for three layers of erosion: federal income tax, state income tax, and inflation. Understanding this helps you evaluate whether to accept an offer or negotiate.
How Taxes Reduce Your Raise
Raises are taxed at your marginal rate — the highest bracket that applies to your income. If you earn $80,000 and receive a $5,000 raise, that $5,000 is taxed at your marginal rate (say 22% federal + 5% state = 27% total). Your $5,000 raise becomes approximately $3,650 after taxes — you don't keep $1,350 of it.
The Inflation Factor
Even after taxes, inflation erodes your purchasing power. At 3% annual inflation on an $80,000 salary, you need $2,400 more per year just to buy the same things. Your after-tax raise of $3,650 minus the $2,400 inflation cost leaves a real gain of about $1,250 per year — roughly $104 per month in additional purchasing power.
What Counts as a "Good" Raise
A raise matching inflation keeps you even. A raise 1-2 percentage points above inflation is a modest real increase. A raise 5+ points above inflation is strong. During high-inflation periods (6-8%), a 3% raise is effectively a pay cut. Use the effective real raise percentage to compare offers and years apples-to-apples.
Using This for Negotiation
Calculate the minimum raise you'd need to maintain your purchasing power: inflation rate plus your effective tax cost. If inflation is 4% and you're in a 27% combined tax bracket, you need roughly a 5.5% gross raise just to break even in real terms. Coming to a negotiation with this specific number — and the calculation behind it — is more persuasive than a general "I'd like more."
FAQ
Is this salary raise calculator free?
Yes, completely free with no signup required. All calculations run locally in your browser.
Why does my after-tax raise seem so small?
Raises are taxed at your marginal rate — the rate that applies to your last dollars of income. If you're in the 22% federal bracket and pay 5% state tax, a $10,000 raise nets approximately $7,300 before inflation. Once you account for 3% inflation on your original salary, the real purchasing power gain is even smaller.
What is the 'real raise' after inflation?
The real raise measures your actual gain in purchasing power. If inflation is 3% and you earn $80,000, prices effectively cost you $2,400 more per year just to maintain the same standard of living. A raise must exceed that amount to represent genuine improvement in your financial situation.
What is a good raise percentage?
A raise matching inflation (typically 3%) keeps you even in purchasing power. Anything above inflation is a real increase. A 5-10% raise is strong performance recognition. Promotions often come with 10-20% raises. In high-inflation periods, a 3% raise may actually be a pay cut in real terms.
Should I negotiate my raise?
Yes — most employers expect negotiation. Come prepared with market salary data (use the Income Percentile Calculator for context), your specific accomplishments, and a specific counter-offer number. The average negotiated raise is 5-8% higher than the initial offer.
How is the monthly take-home increase calculated?
The monthly net increase is your annual after-tax raise divided by 12. This shows the actual change in your monthly paycheck — the number that matters for monthly budgeting and spending decisions.