How do I calculate my real raise after inflation?

Divide, don't subtract: (1 + raise) ÷ (1 + inflation) − 1. A 3% raise under 3.5% inflation is −0.48% real — a pay cut in costume. On $120,000 that gap costs about $580 of buying power a year, compounding every year it isn't repaired.

What raise do I need to keep up with inflation?

Exactly the inflation rate, as a floor: at 3.5% inflation, a $120,000 salary needs $124,200 just to stand still. Anything under that is a real cut regardless of the ceremony; anything above it is the actual raise — usually a much smaller number than the announced one.

Only relative to prices. Under 2% inflation it's a modest real gain; under 4% it's a cut. The honest question at review time is the real figure and the compounding of the last few years — three flat-real years quietly total a double-digit cut no single year admitted to.

Raise vs Inflation Calculator — Your Real Pay Change

Your details

Currency symbol display only

Salary before gross or net — be consistent

Σ/ yr

Salary after

Σ/ yr

Inflation over the same period assumption

Your country's headline figure — or your honest personal one, which usually runs hotter.

Everything is calculated in your browser as you type. Nothing you enter is sent or stored, and no account is needed.

Your result

A pay cut in costume.

−0.5% real

the raise after the currency finished shrinking

The deflation

The nominal raise — the applause number	—
The real raise — after inflation	—
What the gap costs, per year	—
The raise that would have kept you whole	—
Salary needed today to match the old one's buying power	—

Three inflations, same raise

If prices ran at	Real raise	Annual gap
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—	—	—
—	—	—

What moves this result

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Worth checking

Headline inflation is an average basket; yours has your rent, your school fees, your city. A personal rate two points hotter turns a flat real raise into a real cut.

One flat year is weather; three compounding flat years are a 10% real pay cut wearing three small ribbons. Run the last few years together before deciding it's fine.

The whole-again figure is a negotiation floor, not a target — it prices standing still. Market moves for your role price the actual raise; instrument No. 14 compounds the difference.

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Common questions

How do I calculate my real raise after inflation?: Divide, don't subtract: (1 + raise) ÷ (1 + inflation) − 1. A 3% raise under 3.5% inflation is −0.48% real — a pay cut in costume. On $120,000 that gap costs about $580 of buying power a year, compounding every year it isn't repaired.
What raise do I need to keep up with inflation?: Exactly the inflation rate, as a floor: at 3.5% inflation, a $120,000 salary needs $124,200 just to stand still. Anything under that is a real cut regardless of the ceremony; anything above it is the actual raise — usually a much smaller number than the announced one.
Is a 3% raise good?: Only relative to prices. Under 2% inflation it's a modest real gain; under 4% it's a cut. The honest question at review time is the real figure and the compounding of the last few years — three flat-real years quietly total a double-digit cut no single year admitted to.

How this is calculated

Everything below is calculated from your inputs. Inflation is an assumption you control; the scenarios stress it regardless.

nominal = new / old − 1
real    = (1 + nominal) / (1 + inflation) − 1
whole   = old × (1 + inflation)

The gauge reads the nominal raise against inflation — break-even where they meet. Real pay change uses the exact deflator, not the subtraction shortcut, because at higher inflation the shortcut flatters: a 10% raise under 8% inflation is +1.85% real, not +2.

Limitations. Tax-bracket creep can shave a nominal raise further on the way to net; benefits and equity changes ride outside the salary line. The page prices the currency's shrinkage, which is the part reviews reliably forget.

The Real Raise