The Salary Increase Percentage Formula
Calculating your salary increase percentage is straightforward. Here is the formula:
Salary Increase % = ((New Salary - Old Salary) / Old Salary) x 100
Example 1: Simple Calculation
Your salary went from $50,000 to $52,500. What percentage raise did you get?
- New salary: $52,500
- Old salary: $50,000
- Difference: $52,500 - $50,000 = $2,500
- Percentage: ($2,500 / $50,000) x 100 = 5%
Use our Pay Raise Calculator to do this instantly.
How to Calculate in Excel
In Excel or Google Sheets, use this formula:
If old salary is in A1 and new salary is in B1:
=((B1-A1)/A1)*100
This gives you the percentage increase. Format the cell as a percentage if you prefer.
Salary Increase Percentage Examples
| Old Salary | New Salary | Increase | Percentage |
|---|---|---|---|
| $40,000 | $42,000 | $2,000 | 5.0% |
| $50,000 | $52,500 | $2,500 | 5.0% |
| $50,000 | $55,000 | $5,000 | 10.0% |
| $60,000 | $63,000 | $3,000 | 5.0% |
| $60,000 | $66,000 | $6,000 | 10.0% |
| $75,000 | $78,750 | $3,750 | 5.0% |
| $80,000 | $92,000 | $12,000 | 15.0% |
| $100,000 | $108,000 | $8,000 | 8.0% |
What Is a Good Salary Increase?
According to the Bureau of Labor Statistics, here is how to interpret your raise:
- 2-3%: Cost-of-living adjustment (COLA) — keeps up with inflation
- 3-5%: Merit-based raise — above average, rewards good performance
- 5-10%: Strong raise — likely tied to promotion or market adjustment
- 10-20%: Major raise — usually a promotion or job change
- 20%+: Exceptional — typically from switching companies
If your raise is below inflation (currently ~2.5-3%), your purchasing power has actually decreased.
How to Calculate Year-over-Year Raise
If you want to track your salary growth over multiple years, calculate the compound annual growth rate (CAGR):
CAGR = ((Ending Salary / Starting Salary) ^ (1/years)) - 1
Example: Salary grew from $50,000 to $65,000 over 3 years:
CAGR = (($65,000 / $50,000) ^ (1/3)) - 1 = (1.3 ^ 0.333) - 1 = 9.1% per year
Tips for Negotiating a Higher Raise
- Research your market value using Payscale and Glassdoor
- Document your achievements with specific numbers (revenue generated, costs saved)
- Time your request after a big win or during review season
- Practice your pitch before the meeting
Use our Pay Raise Calculator to see exactly how different raise percentages affect your take-home pay.