Raise vs Inflation Calculator
Compare a pay increase with inflation.
Raise vs Inflation Calculator: Scenario Inputs
Annual percentage rate or benchmark index change.
Inflation & Purchasing Power Analysis
Over 3 years at 3.5% inflation, a $75,000 salary requires $83,154 to retain equal purchasing power. Without matching raises, your real compensation experiences an effective reduction of $7,355 (-9.81%).
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How Raise vs Inflation Calculator Works?
The Raise vs Inflation Calculator works by dividing the raise factor by the inflation factor.
Enter the raise
Type the raise in percent, or the old and new salary.
Enter inflation
Type inflation for the same 12 months.
Compare the factors
The calculator divides 1 + raise by 1 + inflation.
Read the verdict
The output labels the result and shows the real change in percent and dollars.
Raise vs Inflation Calculator Formula
The Raise vs Inflation formula divides one plus the raise by one plus inflation and subtracts one.
Real Raise = (1 + R) ÷ (1 + π) − 1
Gap = R − π
Variables
- R
- Pay raise
- π
- Inflation over the same period
Worked example
A 4% raise against 5% inflation gives a real raise of -0.95%. The raise fell short of inflation by 1 percentage point (100 basis points).
Raise vs Inflation Calculator Conversion Table
This table shows the real raise for 5 raises against 3 inflation rates.
| Raise | Real at 2.5% inflation | Real at 3.5% inflation | Real at 5.0% inflation |
|---|---|---|---|
| 2% | -0.49% | -1.45% | -2.86% |
| 3% | +0.49% | -0.48% | -1.90% |
| 4% | +1.46% | +0.48% | -0.95% |
| 5% | +2.44% | +1.45% | +0.00% |
| 6% | +3.41% | +2.42% | +0.95% |
What is Raise vs Inflation Calculator?
The Raise vs Inflation Calculator is a tool that compares one pay raise with one inflation rate for the same period and reports the real result. The calculator returns a clear verdict: the raise beat inflation, matched inflation or fell short.
A raise equal to inflation keeps purchasing power flat. A raise 1 point below inflation cuts real pay by about 1%.
What are the uses of Raise vs Inflation Calculator?
There are 4 main uses of the Raise vs Inflation Calculator.
Judge this year's raise
Get a quick verdict on a raise letter.
Prepare a counter
Ask for the raise that turns a real loss into a real gain.
Compare years
Compare raise-versus-inflation results across several reviews.
Explain results to staff
Managers show how a raise compares with current inflation.
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