Is a 4% raise good with 3.5% inflation?

It keeps you slightly ahead — about 0.5% of real buying power. But if it arrived 18 months after your last raise, prices grew roughly 5.3% in between, and the same 4% is a real pay cut of about 1.2%.

How do I calculate my real raise after inflation?

Divide (1 + your raise) by (1 + inflation over the period since your last raise) and subtract 1. A 5% raise against 3% inflation is a 1.9% real raise; against 6% inflation it is a 0.9% real cut.

What is a good raise in 2026?

Average US raises run 3.5–4.5%, roughly level with inflation — treading water. A raise that means something in buying power starts about 2 points above inflation, and job switchers commonly reset 10–20% higher.

Pay Rise Real-Value Calculator — After Tax and Inflation

Where the raise went

The honest arithmetic

Your buying power, if this repeats

Your salary’s buying power over the next five years if raises like this one keep coming (solid) versus no raises at all (dashed). Today’s dollars. Hover any year.

At the review table

How we calculate

What is included

The real raise divides your new buying power by your old one: (1 + raise) ÷ (1 + inflation) − 1. The “since your last raise” months scale the inflation that already happened while your pay stood still — an 18-month wait against 3.5% yearly inflation means prices moved about 5.3% before your raise even arrived.

What is estimated or left out

Official CPI is an average basket; your personal inflation depends on what you buy. The tax input is a marginal-rate estimate applied to the raise, not a payroll-withholding or final-return calculation. Use the income-tax page for a fuller U.S. estimate.

The formula, in plain words

real raise = (1 + raise) ÷ (1 + inflation since last raise) − 1
after-tax real dollars = salary × real raise × (1 − marginal tax rate)
a raise below inflation is a pay cut wearing a bow

Common questions

My raise beat inflation. Am I done?: You kept your buying power and gained a little — good. The next question is whether your market price grew faster: if people doing your job now get hired at 10% more, your real benchmark is the market, not the CPI.
What should I say if my raise is below inflation?: Facts, calmly: “Prices rose X% since my last raise; this raise is Y%. In buying power that is a Z% cut — can we close the gap?” Numbers make it a business conversation instead of a complaint. This page gives you X, Y and Z.
Does everyone’s inflation match the CPI?: No — the CPI is a national average basket. If rent is half your budget, your personal rate likely ran above the headline in recent years. Enter your own number; the math is the same.

Pay Rise Real-Value Calculator