Target Real Raise Calculator
Combine inflation with desired real growth.
Target Real Raise 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 Target Real Raise Calculator Works?
The Target Real Raise Calculator works by multiplying the inflation factor by the real growth factor.
Enter current salary
Type the salary you earn today.
Enter expected inflation
Type inflation for the coming year.
Enter the real target
Type the real raise you want, such as 2% more purchasing power.
Read the nominal ask
The output gives the nominal raise in percent and dollars and the new salary.
Target Real Raise Calculator Formula
The Target Real Raise formula multiplies one plus inflation by one plus the real target and subtracts one.
Nominal Raise = (1 + π) × (1 + r) − 1
New Salary = Salary × (1 + π) × (1 + r)
Variables
- π
- Expected inflation
- r
- Desired real raise
Worked example
With 3.5% expected inflation and a 2% real target, the nominal raise is 5.57%. An $80,000 salary becomes $84,456.
Target Real Raise Calculator Conversion Table
This table lists the nominal raise needed for 3 real targets at 4 inflation levels, for an $80,000 salary.
| Expected inflation | 1% real target | 2% real target | 4% real target | Salary at 2% real |
|---|---|---|---|---|
| 2.0% | 3.02% | 4.04% | 6.08% | $83,232 |
| 3.0% | 4.03% | 5.06% | 7.12% | $84,048 |
| 4.5% | 5.55% | 6.59% | 8.68% | $85,272 |
| 6.0% | 7.06% | 8.12% | 10.24% | $86,496 |
What is Target Real Raise Calculator?
The Target Real Raise Calculator is a tool that combines expected inflation with a desired real pay increase to give the nominal raise to ask for. The nominal raise covers inflation first and then adds real growth on top.
Adding the two rates gives a close estimate. The exact method multiplies the two growth factors.
What are the uses of Target Real Raise Calculator?
There are 4 main uses of the Target Real Raise Calculator.
Set a negotiation number
Turn a real-growth goal into the exact percentage to ask for.
Design merit budgets
HR teams set merit pools that deliver real growth above inflation.
Plan career growth
Set yearly real pay goals and convert them into nominal targets.
Check offers
Measure how much real growth an offered raise delivers.
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