How to Figure a Salary Increase

by Clayton Browne

Pay raises are a key motivational tool for employers to reward employees for their loyalty and hard work. Unless you are fortunate enough to have a long-term contract with specified wage increases, you are not guaranteed an annual raise, but most businesses try to retain employees by giving raises annually, especially in good economic times. Calculating a raise is easy -- all you have to do is convert your raise from a percent to a decimal and multiply your current salary by a factor including the raise. [1]

Calculate your current pay. If you are paid a salary, then you obviously know what you are paid every month, but if you are paid hourly, you might need to calculate your average monthly pay. If you work full time every week, the calculation is straightforward --- 173.3 total monthly hours times your hourly rate. Assuming you are paid $10 an hour, that means your gross pay is 173.33 times $10, or $1,733.33 per month.

Convert your raise from a percent to a decimal by moving the decimal two places to the left. For example, a 5 percent raise would be .05 -- from 5.0 percent to .05. A 10 percent raise would be .10.

Calculate your pay after your increase. Multiply your current monthly pay times 1.05, assuming a 5 percent raise. If you were given a 10 percent raise, you would multiply your current pay by 1.10. Using that $1,733.33 monthly pay and assuming a 5 percent raise, you would multiply $1733.33 by 1.05, resulting in pay of $1,820 a month. If you got a 10 percent raise, your new monthly pay would be $1,733.33 times 1.10, or $1,906.67.


  • You can also figure your new hourly pay rate after your raise. You simply multiply your current hourly rate by the converted decimal of your raise and add that to your current hourly rate. Assuming an 8 percent raise and a current $10 per hour rate, you would multiply $10 times .08 to get $.80. You then add that $.80 to your current $10 an hour, to get a new hourly rate of $10.80 an hour after the raise becomes effective.


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