1. What is a Pay Increase Calculator?

The Pay Increase Calculator helps determine the exact amount and percentage increase when moving from an old salary to a new salary. It's particularly useful for creating pay increase letters and understanding compensation changes.

2. How Does the Calculator Work?

The calculator uses two simple formulas:

Where:

• New Salary — The proposed or new salary amount
• Old Salary — The current or previous salary amount

Explanation: The calculator first determines the absolute dollar amount increase, then calculates what percentage this increase represents relative to the original salary.

3. Importance of Pay Increase Calculation

Details: Accurate pay increase calculations are crucial for transparent compensation discussions, budgeting, and documenting salary changes in employment records.

4. Using the Calculator

Tips: Enter both the old and new salary amounts in dollars (without commas). The calculator will automatically compute both the dollar amount increase and the percentage increase.

5. Frequently Asked Questions (FAQ)

Q1: Should I include bonuses in the salary amounts?
A: For base salary comparisons, don't include bonuses. For total compensation comparisons, include all cash compensation.

Q2: How is percentage increase useful?
A: Percentage helps compare increases across different salary levels and is often used in compensation benchmarking.

Q3: What's considered a good pay increase?
A: Typical annual increases range 2-5%. Promotional increases often range 5-15%, varying by industry and role.

Q4: Should I use gross or net salary?
A: Always use gross (pre-tax) salary amounts for these calculations.

Q5: How can I use this for a pay increase letter?
A: Include both the dollar amount and percentage increase in the letter to clearly communicate the change.