How to Calculate a Raise Percentage
Last updated: August 13, 2026
There are really only two directions this math ever goes: you know the percentage and want the new salary, or you know both salaries and want the percentage. Every version of "how do I calculate a raise" question boils down to one of those two, so the fastest way through this is to treat them as separate, simple steps rather than one confusing formula.
Going from a percentage to a new salary
Multiply your current salary by the raise percentage, written as a decimal, to get the raise amount. Then add that raise amount to your current salary. A $45,000 salary with a 6% raise gets a raise amount of $2,700, for a new salary of $47,700.
As a formula: new salary = current salary × (1 + raise percentage). A 6% raise means multiplying by 1.06, not 0.06, since 1.06 already includes the original 100% of your salary plus the 6% increase on top of it.
Going from a flat dollar raise to a percentage
If you already know the dollar amount of the raise rather than a percentage, there's no multiplication step. A $2,000 raise on a $52,000 salary is simply a new salary of $54,000. To express that same raise as a percentage, divide the dollar amount by the original salary and multiply by 100: 2,000 divided by 52,000 comes out to about 3.85%.
Going backward: from two salaries to a percentage
This is the version people usually mean by "hike percentage." Subtract the old salary from the new salary, divide the result by the old salary, then multiply by 100.
As a formula: raise % = ((new salary − old salary) ÷ old salary) × 100. Going from $55,000 to $60,000 works out to 9.09%. This is exactly what "reach a target salary" mode on the pay raise calculator does automatically, enter your current salary and the salary you want, and it returns both the percentage and the dollar amount needed to get there.
Doing the same math on an hourly wage
The formula doesn't change for an hourly rate instead of an annual salary, just swap the numbers. A 3% raise on an $18 hourly wage is $18 times 1.03, which comes out to $18.54 an hour. Going backward works the same way too: figure out the dollar difference between the old and new hourly rate, divide by the old rate, and multiply by 100.
Enter your own numbers into the pay raise calculator and it runs whichever direction of this math you need automatically, including the monthly and per-paycheck breakdown.
Frequently asked questions
What is the formula for a raise percentage?
Subtract your old salary from your new salary, divide the result by your old salary, then multiply by 100. Written as a formula: ((new salary minus old salary) divided by old salary) times 100. This works whether you call it a raise percentage, a hike percentage, or a percent increase, all three ask the same question.
How do I calculate a merit increase?
A merit increase uses the exact same math as any percentage raise: current salary times the merit percentage your employer assigns, added back to your salary. What makes it a merit increase rather than a flat cost-of-living bump is that the percentage is usually tied to a performance rating, so two people on the same team can end up with different percentages in the same review cycle.
How do I calculate back pay after a raise?
Back pay covers the gap between what you were actually paid and what you should have been paid once a raise is applied retroactively. Work out the per-paycheck difference between your old and new pay, then multiply that difference by the number of paychecks the raise should have covered but did not.
How do I add a percentage to a number, like 15% or 20%?
Convert the percentage to a decimal by dividing by 100, multiply it by the original number to get the increase, then add that back to the original number. Adding 15% to 200 means 200 times 0.15, which is 30, added to 200 for a total of 230. A raise percentage is just this same operation applied to a salary instead of a plain number.
What is a 100% increase, in plain terms?
A 100% increase means the number doubles. A $40,000 salary with a 100% increase becomes $80,000, since you are adding an amount equal to the whole original number back to itself.
Can a raise percentage come out negative?
Yes, whenever the new number is lower than the old one, the same formula still applies and just returns a negative result. A few examples using the percent-change formula: 4 to 5 is 25.00%, 6 to 9 is 50.00%, 8 to 10 is 25.00%, 10 to 9 is -10.00%. A negative result means a decrease, not a raise.