1. What is the Pay Increase Calculator?

This calculator projects your future pay based on a consistent annual increase rate over 10 years. It helps you understand how compounding pay increases affect your earnings over time.

2. How Does the Calculator Work?

The calculator uses the compound interest formula:

Where:

• Old Pay — Your current salary or wage
• Rate — Expected annual pay increase percentage
• 10 — Number of years for projection

Explanation: The formula accounts for compounding - each year's increase builds on the previous year's increased pay.

3. Importance of Pay Projections

Details: Understanding long-term pay growth helps with financial planning, career decisions, and salary negotiations.

4. Using the Calculator

Tips: Enter your current pay and expected annual increase rate. The calculator will show your projected pay after 10 years and a year-by-year breakdown.

5. Frequently Asked Questions (FAQ)

Q1: How accurate are these projections?
A: They assume a constant annual increase rate. Actual pay changes may vary year-to-year.

Q2: Should I include bonuses in "Old Pay"?
A: Only if your annual increase rate applies to total compensation including bonuses.

Q3: What's a typical annual pay increase rate?
A: Varies by industry and position. 2-5% is common for cost-of-living adjustments; promotions may bring higher increases.

Q4: Can I calculate for fewer than 10 years?
A: The calculator is fixed at 10 years, but you can view intermediate years in the table.

Q5: Does this account for inflation?
A: No, the results show nominal dollars. For real purchasing power, subtract expected inflation from your increase rate.