How to Use This Calculator

I built this pay raise calculator based on my nearly 20 years of experience working in corporate America. Over the course of my career, I've learned that annual raises really help, especially if you're going to be working at the same place long-term where there's a bit of stability. Of course, this isn't always possible. Early in my career I worked at a couple of companies where consistent raises weren't ever going to happen.

At my current company, I started in an entry-level role earning $53,000. Over a 15-year period, I've been able to grow my salary to just over $100,000. Not all of this growth came from standard annual raises. Some years, I've been able to pair a promotion with an annual raise to essentially get two raises in one year. I've never had a massive raise—they've always been smaller bumps between $2,000 to $4,000 annually that don't look like much by themselves, but are awesome long-term.

Bottom line: a pay raise is always welcome. I love getting paid more for doing the exact same amount of work I used to do. This calculator helps you see the true long-term impact of those raises.

Step 1: Enter Your Current Compensation

Start by entering your current compensation amount. According to ZipRecruiter, the average American salary is currently $28.16 per hour, which is why I've set this as the default in the calculator.

The calculator automatically converts between all time periods, giving you a complete picture of your compensation regardless of how you're typically paid.

Step 2: Set Your Hours per Week

Enter the number of hours you work per week. This is crucial for accurate annual calculations and projections. The standard 40-hour work week is the default, but you can adjust this based on your actual schedule.

Step 3: Choose Your Raise Type

According to Investopedia, a typical salary increase of 3% is normal in the United States, often referred to as a cost-of-living pay increase. This matches my own experience in corporate America as well, which is why 3% is the default setting.

The calculator supports three different ways to specify your raise:

• Raise by Percentage: The most common method. Enter your percentage increase (e.g., 3% for cost-of-living, 5-7% for strong performance)
• Raise by Dollar Amount: Enter a specific dollar increase per your selected time period (e.g., +$2.00 per hour or +$5,000 per year)
• New Total Compensation: Enter your new total compensation when you've been offered a specific salary

Step 4: Enable 10-Year Projections

Here's where the calculator shines. Enable the 10-year projection to see how annual raises compound over time. The projection assumes you receive the same percentage raise each year, demonstrating the power of compound growth in your career earnings.

This is particularly important given the relationship between wages and inflation. According to Statista, wage increases often keep up with overall inflation, contrary to what you may have heard. For example, in March 2025, inflation amounted to 2.4 percent, while wages grew by 4.3 percent. The inflation rate has not exceeded the rate of wage growth since January 2023.

However, if you don't get an annual raise, it's kind of like getting paid less over time, especially if a couple of years pass by without a compensation increase. The 10-year projection helps visualize this impact.

Step 5: Calculate and Analyze Results

Click "Calculate Pay Raise" to see your results, including:

• New Compensation Amount: Your new rate across all time periods.
• Percentage Increase: The exact percentage change in your compensation.
• 10-Year Impact: Total additional earnings from compound growth.
• Visual Chart: Interactive graph comparing growth with and without raises.

How to Ask for a Raise

Brian Creely, a corporate recruiter with over 20 years of experience and host of the "A Life After Layoff" YouTube channel, offers excellent advice on negotiating raises below.

Approaching the Conversation

Creely emphasizes preparation: "When you set up that meeting you want to give your boss advance notice of your intent for why you want to meet—you don't want to catch them off guard."

Creely recommends a data-driven approach: "You want to present the data that you have found including the market wage data that you've discovered, the skills and the accomplishments and justifying why you should qualify for a significant raise, and you want to do it in a firm and professional way and try not to bring emotion into it."

Handling Different Responses

If they're non-committal: Creely suggests responding with: "Thanks for hearing me out. I'm very interested in hearing what you come back with, so can we put something on the calendar this time next week so that we can follow up on this topic?"

If they say they can't afford it: Try this approach: "I appreciate that you're hearing me out and I understand the business needs, so let's revisit this topic in three months. In the meantime, would you be open to increasing my vacation time?"

If they say your number is too high: Stand your ground professionally: "I've done a lot of research on the external job market and I think that this is very fair based on what other employers are paying. However, I'm happy to go back and do some more research to make sure that my numbers are accurate."

Know Your Worth

Creely reminds us: "At the end of the day we have to act like free agents and we shouldn't tolerate a company who doesn't value us properly." He also notes that "it's not unheard of to make 50% increases or more by jumping to another job."

Why Small Raises Matter

From my experience, those seemingly small annual raises of 2-4% add up significantly over time. Let me share a real example from my own career:

This growth came from a combination of annual raises and strategic promotions. The key lesson? Consistency matters more than size. A reliable 3% annual raise is often better than sporadic larger raises with years of stagnant pay in between.

Making the Most of This Calculator

Remember, this calculator is just one tool in your career planning arsenal. Combine it with market research, performance documentation, and strategic timing to maximize your earning potential over your career.

Want to explore other financial planning tools? Check out my Coast FIRE Calculator to see how your raises impact early retirement, or the Barista FIRE Calculator to plan for semi-retirement.