Home
Back
Salary Increase Formula:
The Salary Increase Calculator projects your future earnings based on a consistent annual raise percentage. It helps visualize how compound salary increases affect your income over time.
The calculator uses the compound interest formula applied to salary:
Where:
Explanation: The formula accounts for compounding effects where each raise builds upon the previous year's increased salary.
Details: Understanding potential future earnings helps with financial planning, career decisions, and negotiation strategies. It demonstrates the power of consistent raises over time.
Tips: Enter your current salary, expected annual raise percentage (e.g., 3% for cost-of-living adjustments), and number of years (up to 10). The calculator shows yearly projections.
Q1: What's a typical annual raise percentage?
A: Typically 2-5% for cost-of-living adjustments. Promotions may bring 10-20% increases.
Q2: Does this account for inflation?
A: No, the calculator shows nominal dollars. For real value, subtract expected inflation from your raise percentage.
Q3: What if my raises vary each year?
A: This calculator assumes consistent raises. For variable raises, you'd need to calculate each year separately.
Q4: Can I project beyond 10 years?
A: While possible, projections become less reliable over longer periods due to career changes and economic shifts.
Q5: How accurate are these projections?
A: They're estimates based on consistent raises. Actual salaries depend on many factors including performance, company health, and market conditions.