Real Raise Calculator

Enter your raise and the current inflation rate — see your real purchasing-power change and the raise you'd have needed just to break even.

Use the latest 12-month CPI change from bls.gov.

Real raise (purchasing power)
—
New salary (nominal)—
New salary in today's buying power—
Real gain/loss per year—
Raise needed to break even—

Pre-tax figures; personal inflation varies with what you buy.

Real Raise Calculator — free from paycheckkit.com

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The real raise formula

real raise = (1 + raise%) ÷ (1 + inflation%) − 1

Subtracting inflation from your raise is close enough for everyday numbers, but the division form is exact and matters when either number is large. The calculator uses the exact form.

A worked example

A $70,000 salary with a 4% raise becomes $72,800. If inflation is running 3%, the real raise is (1.04 ÷ 1.03) − 1 = 0.97% — your new salary buys about $680 more per year than the old one did, not $2,800. With 5% inflation, the same "raise" is a real cut of about 0.95%: the bigger paycheck buys less than last year's smaller one.

Using this number in a negotiation

"My raise is below inflation" is a concrete, unemotional argument that HR departments understand — you're asking to not be paid less, which is an easier case than asking to be paid more. Bring the CPI figure, show the real-raise math, and anchor your ask at inflation plus the merit percentage they'd normally give.

Frequently asked questions

What is a real raise?

Your raise after subtracting inflation. If you got 4% and prices rose 3%, your purchasing power grew about 1% — that's your real raise. If inflation was 5%, you effectively took a pay cut despite the bigger paycheck.

How do I calculate a raise adjusted for inflation?

The precise formula is (1 + raise) ÷ (1 + inflation) − 1. For small numbers, raise minus inflation is a close approximation: a 6% raise with 3% inflation is a real raise of about 2.9%.

Where do I find the current inflation rate?

The US Bureau of Labor Statistics publishes the Consumer Price Index (CPI) monthly at bls.gov — the '12-month percent change' is the number to use. News coverage of the monthly CPI release quotes it directly.

Is a 3% raise good?

It depends entirely on inflation. With 2% inflation, a 3% raise grows your purchasing power. Against 4% inflation it's a real pay cut of about 1%. Merit raises averaged 3-4% in recent years, which is why job-switching (typically 10-20% jumps) outpaced staying put.

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