Three ways to describe the same raise
Suppose your annual gross salary is $50,000 and the new salary is $53,000. The increase is $3,000, which is 6% of the original salary. You can get the same answer from whichever figure you know:
- Percentage: $50,000 × (6 ÷ 100) = $3,000 increase; $50,000 + $3,000 = $53,000.
- Flat amount: $50,000 + $3,000 = $53,000; ($3,000 ÷ $50,000) × 100 = 6%.
- New pay: $53,000 − $50,000 = $3,000; divide that difference by the old pay to get 6%.
The percentage always uses the old pay as its denominator. Dividing by the new pay answers a different question. If old pay is zero, a percentage increase from that baseline is undefined; compare dollar amounts instead.
What an hourly raise means over a year
An increase from $25 to $26.50 per hour is $1.50 per hour, or 6%. At an assumed 40 hours each week for 52 paid weeks, that is $1.50 × 40 × 52 = $3,120 more gross pay in a year. Change the hours or paid weeks if your schedule differs. A change in hours can alter annual earnings even when the hourly rate stays the same.
Compare offers with the right context
- Check whether the figure is an hourly rate, annual salary or one paycheck.
- Use the same assumed hours and paid weeks on both sides of the comparison.
- Keep bonuses, benefits, overtime, taxes and deductions separate; this is a base gross-pay comparison, not take-home pay.
- A lower new rate is a pay reduction. Its percentage change is negative, using the old rate as the baseline.
Calculate your own figures
The Pay Raise Calculator accepts all three input methods and shows the dollar and percentage difference together. For a comparison between annual salary and hourly rates, use the salary versus hourly guide.
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