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Salary Increase Formula:
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The salary increase percentage measures how much a salary has grown from its original amount to a new amount. It's a key metric for understanding compensation changes, whether for individual raises, company-wide adjustments, or comparing job offers.
The calculator uses the salary increase formula:
Where:
Explanation: The formula calculates the difference between the new and old salary, divides by the old salary to get the relative change, then multiplies by 100 to convert to a percentage.
Details: Understanding salary increase percentages helps employees evaluate raise offers, compare job opportunities, and track career progression. For employers, it helps maintain equitable compensation practices and budget for payroll changes.
Tips: Enter both salary amounts in the same currency (e.g., annual or monthly). The old salary should be the amount before the increase, and the new salary should be the amount after the increase.
Q1: What's considered a good salary increase percentage?
A: Typical annual raises range 2-5%. Promotions may bring 10-20%. Changing companies might yield 15-30%, but varies by industry and location.
Q2: How does this differ from cost of living adjustments?
A: COLA aims to maintain purchasing power (often matching inflation). True raises exceed inflation, representing increased compensation.
Q3: Should I use gross or net salary for calculations?
A: Typically use gross (pre-tax) salary, as tax rates may change independently of compensation.
Q4: What if my salary decreased?
A: The formula works for decreases too - it will show a negative percentage.
Q5: How does this work for hourly wages?
A: Convert to equivalent annual salaries (hours × wage × weeks) or use the same formula with hourly rates directly.