Raise vs Inflation Calculator

Got a pay rise — but is it a real raise? Enter your old and new salary and the inflation rate to see your inflation-adjusted raise, whether your purchasing power went up or down, and the salary you'd need just to break even. Updates as you type.

Real raise vs nominal raise

Your nominal raise is the headline percentage. Your real raise is what's left after inflation eats into it:

real raise = (new ÷ old) ÷ (1 + inflation) − 1

• Raise above inflation → your purchasing power grows. A genuine raise.
• Raise equal to inflation → you're standing still in real terms.
• Raise below inflation → a real-terms pay cut, even though the number went up.

This is an educational estimate. Inflation affects different households differently, and taxes also change your take-home. Not financial advice.

FAQ

How do I know if my raise beats inflation?

Compare your percentage raise to the inflation rate. If you got a 4% raise and inflation was 3%, your pay grew faster than prices, so your real (purchasing-power) raise is positive — about 1%. If your raise is below inflation, you can buy less than before even though your salary number went up.

How is a real (inflation-adjusted) raise calculated?

Divide your new salary by your old salary, then divide by one plus the inflation rate, and subtract one: real raise = (new ÷ old) ÷ (1 + inflation) − 1. This strips out inflation so you see the change in what your money can actually buy.

What raise do I need just to keep up with inflation?

You need a raise equal to the inflation rate. If inflation is 3%, a 3% raise leaves your purchasing power exactly flat — anything less is a real-terms pay cut. The calculator shows the salary you would need just to break even.

Why did my salary go up but I feel poorer?

Because prices rose faster than your pay. A raise that is smaller than inflation is a real pay cut: the number on your payslip is bigger, but each dollar buys less, so your standard of living drops. This is why comparing raises to inflation matters.

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