1. What is Pay Increase Percentage?

The pay increase percentage measures how much a salary or wage has increased compared to the previous amount. It's a key metric for understanding compensation changes and negotiating salaries.

2. How Does the Calculator Work?

The calculator uses the percentage increase formula:

Where:

• \( \text{New Pay} \) — The current or proposed pay amount
• \( \text{Old Pay} \) — The previous pay amount

Explanation: The formula calculates the difference between new and old pay, divides by the old pay to get the relative change, then converts to a percentage.

3. Importance of Pay Increase Calculation

Details: Understanding pay increase percentages helps employees evaluate job offers, negotiate salaries, and track career progression. Employers use it to determine raises and compensation adjustments.

4. Using the Calculator

Tips: Enter both old and new pay amounts in the same currency. The calculator works with any currency as long as both values use the same unit.

5. Frequently Asked Questions (FAQ)

Q1: What's considered a good pay increase percentage?
A: Typically 3-5% is standard for annual cost-of-living adjustments, while 10-20% might indicate a promotion or significant role change.

Q2: How does this differ from percentage point increase?
A: Percentage increase is relative to the original amount, while percentage points refer to absolute differences between percentages.

Q3: Can the result be negative?
A: Yes, if new pay is less than old pay, the result will be negative, indicating a pay decrease.

Q4: Should I include bonuses in the calculation?
A: For total compensation comparison, include all forms of payment. For base salary comparison, use only the base amounts.

Q5: How does this relate to inflation?
A: To determine real wage growth, subtract the inflation rate from your pay increase percentage.