Search
FREE TRIAL
Search
Search
Close this search box.

Business Math: How to Calculate Pay Raise by Percentage

When it’s time for annual performance reviews, if you plan on including pay raises, you need to know the simple math behind calculating pay increases correctly. Raises can be based on any number of things including a worker’s piers, standard industry rates, length of time on the job, the amount of work to do, and even whether or not the boss likes the employee or not. There are few, if any, laws that govern how and when increases are granted, so it’s up to you to determine what you’re willing to give.

Timesheets.com has a free pay raise calculator that can help.

Calculating the Percentage

Generally, you will want to increase their pay by some percentage. The national average pay increase generally hovers between 3% to 3.5% depending on the year. The trend is to reward top performers with a higher than average pay raise and average workers with lower pay raises.


I have written about percentage before – in the post about calculating sales tax – now we’ll relate percentage to pay increases.

When your employee is ready for a pay increase, decide what percentage is fair and then do the following calculation:

(current rate)(percent increase)=(increase)

Step 1: Convert the percentage into decimal form

This is pretty basic, but you need to convert the percentage into a real number that you can use to multiply by the employee’s current pay rate. To do this, simply move the decimal two places to the left. For a 3% increase, you will use .03.

Step 2: Multiply the employee’s current pay rate by that decimal

If your employee makes $15/hour, then you have: 15x.03=.45. So your employee’s increase is 45 cents per hour. For an employee who makes a salary of $45,000/year, then you have: 45,000x.03=1,350. So your salaried employee’s pay increase is $1,350 per year.

Why You Have to Convert the Percent

This is just a little theory and not needed to do the problem.

The percent symbol is used to tell you something about the number it sits beside. Percent means ‘parts per hundred’. So if a % sign sits beside a 3, it really means 3 parts per 100. You don’t need to know this to calculate a pay increase but it might help you to understand why you need to convert the percent into decimal form to begin with. 3% tells us we need to multiply our pay rate by 3 pieces of a hundred.

Do you remember what the decimal places mean? The first decimal place is the tenths place and the second is the hundredths place. This is why when we convert our percent we have to move two places – we have to open up the hundredths place.

Automatic Pay Raise Calculations

The Human Resources Documents within the Timesheets.com time tracking service calculates pay raise percentage as well as keeps record of changes. Record keeping is required by the FLSA for all sorts of things related to payroll.

Want to give it a try?

Try it FREE now!

  • 205 comments

You May Also Like

205 Responses

  1. Can you tell me I currently make 10:50 dollars an hour just got 3% pay raise what will my new hourly wage be.

    1. Sure Kathy. I can help you. Find 3% of $10.50 per hour by multiplying 10.5 by .03. That equals .315. So your new hourly wage will be $10.50 + .315 = $10.815

      1. I am getting a 2% raise at 11.35.57 an hour.this will be retro from November 2016.how much is this?

        1. If your hourly rate is (X) dollars, then you plug your raise percent amount (Y) into the following equation (use a calculator if you wish):

          (X)*(1+((Y)/100) )=(New Pay)

          Example: Current pay=$(10) per hour ; raise of (5%), the following equation illustrates this formula:

          (10)*(1+((5)/100))=
          10+0.5=
          $10.50 dollars per hour

      2. Hi, if i get pay increase of 2 % on $37K salary a year then how much will I make at the end of 5 years at 2% annual increase?

          1. So the change in the yearly amount doesn’t increase the 2% increase each year. How does the 2% increase stay the same all 5 years? I would think that in year two the 2% is mutliplied by $37,740 instead of $37,000 and so on. Please help….

        2. Hi Rhonda, I hope this helps

          pay increase of 2 % on $37K salary a year then how much will I make at the end of 5 years at 2% annual increase?

          Equation:A=P(1+0.01/1)^1*5
          Proof:

          P 37000 A= 40850.98972
          I 0.02
          yearly 1
          N 5

          2. First, you need to multiply your current rate by the decimal value of your raise percentage. 1843 x 0.03 = 55.29. Next, add your current wage to the previous value you calculated to get your new wage. So, $1843 + $55.29 = $1898.29.

        3. $37,000.00 x 2% = $740.00 increase year 1 – end of year 1 total $37,740.00
          $37,740.00 x 2% = $754.80 increase year 2 – end of year 2 total $38,494.80
          $38,494.80 x 2% = $769.90 increase year 3 – end of year 3 total $39,264.70
          $39,264.70 x 2% = $785.29 increase year 4 – end of year 4 total $40,049.99
          $40,049.99 x 2% = $801.00 increase year 5 – end of year 5 total $40,850.99

          1. First you will multiply your current hourly wage by the decimal value of your raise (19.00 X 0.25= 4.75). You will then add the total to your hourly wage (4.75 + 19.00= 23.75). Your new hourly wage is $23.75.

      3. Hi,i get paid 10.50 x hr and 4% of the service charge,if we have to divide $13,730 with 9 more servers,how much are we supposed to get?

          1. I assume you are referring to a 2.5% increase on a $14.40 hourly wage. If that’s not correct, please clarify so I can assist you further. First, you will convert 2.5% into decimal form, which is 0.025. You will then multiply the decimal increase by your current hourly wage, which is 0.025 X 14.40 = 0.36. Add 0.36 to 14.40, and you’ll get a total of $14.76/hour

      6. Hi I make 17.16 an hour but I’m suppose to be getting a 3.5 percent raise how much will I be making now

      7. Hi Peggie, my husband makes 10.50 an hr and recently got a 2.5% increase. In his performance he got exceeds on everything. So can ypu tell me how it end up being a 4 cent raise ?

      9. can you tell me what
        A worker earns ​$29.50 per hour. If she receives a 9 and one half
        ​% pay​ raise, what is the amount of her hourly​ raise?

        1. You would multiply the employee’s current hourly wage by the decimal value of 9.5%. $29.50 X 0.095(raise) = 2.8025. The employee will get an increase of $2.8025 per hour, which totals to $32.3025 per hour.

      10. So i have a question towards ur answer lets say its 3.5% and pay is 10 65 it would be .035 right so 10.65 + .372

        1. First you need to multiply your current hourly rate by the decimal value or your raise percentage ($13.33 x 0.03= 0.3999). Next, you’ll add the total value to your current hourly rate ($13.33+$0.3999= $13.72/hr). To find your yearly salary, you need to multiply your new hourly rate by the amount of hours that you’re going to work in the year. Now, assuming that you’re full-time and work every day, you’re expected to work about 2,080 hours each year. 2080 X 13.72= ~$28,537 annual salary.

    2. I got 1 percent raise every six months for 1 year what was my actual raise for the year

      1. You need to multiply your hourly wage or salary by 1 percent (0.01). For example, if you make $15/hr and get a 1% raise at the end of 6 months, you will multiply 15 X .01. That equals 0.15. Your pay after 6 months would be $15.15.

    1. Hello Beverly. Multiply your hourly rate by .02 and you get 19 cents. So your new hourly rate will be $9.95 per hour.

      1. Hello, Can you help me? I have employees that work 40 hour weeks and this is not an issue for their percentage of increase. I also have compressed workers that receive 4 hours of OT every day they work. How can I figure out the percentage to give them in comparison to the 40 hour a week employee?

        1. Good morning
          I make 14.21 an hour. I just received a 2% raise. How much will i be making an hour

          1. You will want to multiply your hourly wage by the decimal value of your increase. In this case, you would multiply 14.21 X 0.02 = 0.2842. Add your current hourly wage to this number 14.21 + 0.2842 = 14.49. Your new wage would be $14.49.

      1. I’m unfortunately not familiar with SSI, but I can tell you that a 1.6% increase of 752 is 12.032. So, all together you’re looking at a change from 752 to 764.032.

  3. i need to figure the equation differently. at an increase of $.48 with a 3.5% increase what is the rate of pay before ?

    1. Hi Johnny,

      We can just plug in what we know to the formula and solve. Rate(%) = increase

      R(.035) = .48

      Now divide both sides by .035 to get R = .48/.035

      R = 13.71

    1. Hi Shana,

      You’ll be making 23 cents more per hour so that will bring your hourly rate up to 19.51.

        1. If you don’t know how much 5% of $20 then the answer to your question “what will I be making once I get this raise?” is … TOO MUCH!

          2. Hi there. 18.15 multiplied by the decimal value or 2% (0.02) equals 0.363. 0.363 + 18.15 equals $18.513 per hour

  9. Hello I make $16.50 an hour and I just got a $80.47 (3.0%)per month raise. How much will my new hourly pay be?

  13. Write a blog post showing how to calculate a pay rise – get a comment section full of people asking you to do it for them. Gotta love the internet!

    1. You got that right! It’s insane to think you can spell something out, step by step, and seeing the questions coming in. Timesheets.com has been handling with grace instead of saying “can you read my damn post, please?”

  15. Hi if I make 11.18 and I’m getting a raise for 3.5 percent how much will I be making

  16. if i received 824.00 a month and I’m getting an 3.0 percent increase in Jan what will i be getting each month

    1. Hi Kay,

      This problem is a little different. Writing out the problem in words should help it make sense. 1.5% of your old salary was your raise last year so we are going to add that to your old salary to get your new salary.

      (old salary) + 1.5%(old salary) = new salary

      Let’s call the old salary x since we don’t know that value. And we’ll write 1.5% as a decimal to get:

      x + .015x = 2018.30

      Combine terms:

      1.015x = 2018.30

      Solve for x:

      x = 2018.30/1.015

      x = 1988.47

      Last year’s salary was $1988.47

  20. I have an employee who makes $13.00 per hour. I want to increase her hourly rate to $15. What percentage of increase am I giving her

    1. Plug in your numbers to the equation to get 13x=2.
      Divide both sides by 13 to get .15
      So it’s a 15% raise.

  21. I make $53,610.00 per year, next year I am slated to receive a 26.03% increase. How much would my new annual salary be?

  24. Hello i make $9.00hr and just got a 2.5% raise how much would i be making on the hour now?…. Thanks!

  26. Morning, I make 35.80 and hour, my increase is 2%, however my multiplyer is 3%. I’m not sure when/how I calculate the 3%. Is it 3% increase if my 2% raise? Thnx Tom

  27. Hello I have a question if I make $15.12 an hour and my job is giving us a 9.5% wage increase how much money is that?

  29. Can you help me if I was getting 10.62 a hour a now it’s say 10.830 a hour I much raised they gave me

  30. I make 10.75/hr Sunday thru Thursday and make 11.25/hr Friday and Saturday I’m receiving a 2% raise how much will my pay be

  31. Whats my pay raise by percentage rate. I made 21.00 hr and now I make 21.75 an hr . Whats my percentage of pay raise? I made 48,000 yeár salary/ bonuses included. Need to find out next years estimated salary…Please .

  32. Hello I got a 7.5% pay increase and I get paid 17 an hour. Would that equal $18.27? Thank you for your help.

  34. I am getting a 14.9% raise. I currently make 12.00. Then I will be getting the same raise 3 more times.

  38. lol you explain how to do it yet people ask you ……yet they can do it themselvs……….lol

  39. I have a contract that states that I my increase of CPI cannot be more that 3.5%. Last years CPI .7 and this years CPI is 2.1. My fee last year was $1.12. So the most I can increase would be $1.12 * .035 = .0392 = .39 cents?

    So last years fee was $1.12 and I would increase by the maximum of .39 = 1.51?

  40. Hey just to make sure when you calculate your hours by how much you get an hour you use multiplication right?

    2. Hi, Im making 13.00 dollars an hour. Im getting a 52 cents raise on the hour how do i calculate that.

      1. Hi there. Since you’re making $13.00 an hour and you’re getting a raise of $0.52, you will add your raise to current hourly rat, which totals to $13.52/hour.

  42. It’s funny to see that this article tells you the EXACT steps on calculating your hourly/monthly/yearly earnings yet almost EVERY single comment is “how much will I make if … “.

    Do people read anymore?!?!

  43. What is the formula to find out how many years it will take to get to 30.00 p/hr if I get a standard 2% raise every year.

  44. Hello Peggy,
    I make $3068.00 a month. how much will that increase with a .03% increase?

  46. Sorry, not sure if I’m doing this right because I’m not leaving a reply but would like to make new post.

    Math & I have never been good friends.

    I was making $18 an hour but now make $24 an hour getting a new job.

    Would a percentage increase be %24 or %2.4?

    Thank You

      1. Hello I just received a 1%raise I make 16.50 now how much will I be making ?

  49. I make 95,000 a year before bonuses. I am to receive a .2% raise. Would that be 95000x.02? and what that equals would be divided over the year ?

    1. Hi Tommy. Yep. Add 1900 to your 95000 and then divide that by however many paychecks you get.

  50. Thanks for breaking down the ‘why’ helps people who don’t like math to understand and comprehend

  53. I get 1% of my salary for each year that I work. So if I work 35 years I will get 35% of my salary. What if I work 35 years, and eight months would that be 35.8 percent of my salary?

    1. It’s not this simple. You need to use the compound interest formula to get an accurate number. For example, if you make 20,000 per year, your first raise will be $200. The next year your raise will be $202 and the next it will be 204.02 and so on.

      1. Hi Peggy,

        Just want to say you have done a fantastic job on the way you have taken the time to respond and assist everyone that had a question. Awesome job!

  55. Can you help me I get paid 21.00 dollars an hour they raise 10% more how much am I gonna make now

  56. I make 12.30 per hour and I want to make 13.50 per hour. What is the pay increase in percentage?

  57. If I make 22,000 a year and the avareage pay in my position is 47,000 is that 50% higher than my pay rate or 1.2% higher?

  58. Presently i have 2 Lakhs 17 Thousands / Anum, Salary now i gonna switch to another organisation, I just wanted to ask how do i calculate my salary increase by %ge

  59. My husband is getting ready to be laid off at the end of the month instead of trying to live off unemployeement he found a job that is a $5 cut in pay. He’ll make 15.53 a hour the 1st 3months then goes to 17 an hour. They give a 2%raise based on what you have made in a certain time frame. How would I calculate that? Lets just say he’ll make 12000 in this time frame. How would this translate into an hourly increase?

  61. I will be making $9 an hour but I also will be receiving 7.5 increase on my pay. Can u tell me what will be my new wage ?

  62. Can you tell me I currently make 10:50 an hour, i work on Saturday, Sunday and Monday for 6 hours, i get pay every 2 weeks.

  64. Good day, curious, say if I made 26.08 an hour and got a 6% increase, what would be my new hourly wage? Thanks

  66. If I’m being paid $16 dollars an hour and got a pay increase of 2 dollars how would I calculate that?

    1. Word the problem as follows: What percent of 16 is 2.
      Write that out in math: x*16=2 –> x=16/2 –> x=.125
      So 12% was your increase.

      1. Hi. Thanks for helping people out. This reply does not work for me though as I dont the math you used and the symbols used such as x*. If you could include the reverse method in this article: how to calculate a pay raise increase not just by percentage but by the dollar/currency increment amount and how to word the problem and also explain it for us that are not good with math/math symbols that would really help a lot of people. For instance. I pay someone 14 per hour and if I want to pay them 19 per hour, I don’t know how to go about figuring the percentage out from this angle rather than what is explained in the article which only talks about things if we already know the perentage. The calculator only works based on percentage but we often need to know the other way around. Thanks much : )

  68. If someone is making is making $175,00 annually and they get a $15,000 raise to $190,000, what is the percentage rate of the increase?

  69. Im getti g paid 10.17 an hr and everyone is getting a 3% raise …. How much is mine

  70. If someone gets a $50.00 dollar increase on there rent is that 10% interests or less?

  71. Im making 8.31 an hr and getting a 2% raise how much will my hrly pay go up to??? Need to know now

  72. So if I get paid $12.47 and I’m getting a 3% raise how much is it in total more?

  73. I make 33,915$ a year our new contract just passed and they owe us 2% for a year-and-a-half does anyone know how much that would be

  75. I just got a raise. I had currently made 8.40 an hour. Now i make 9.30 an hour. However i noticed my raise was 10 cents short. It was supposed to be 9.40 an hour. Could you tell me exactly how much of a raise i got please. Thank you

  79. Hello, I make 16.19 an hour and received a 2.4% increase. What is my new hourly amount please?

  81. I make 12.93 an hour, but will be getting a 2% raise from the midpoint of 14.52 an hour. How much would that be?

  82. I make 30,000 annually. Received a $ 580.00 increase for the year. What is the percentage?

  83. I am getting a 3% raise at 36.62 an hour.this will be retro from July 2017 to August 2017 how much should I expect to get?

  85. If i make 12$ hr and I been in the cleaning industry 10 yrs how much of a raise would be fair to accept

  86. Kevin got a raise at his job. His hourly pay went from $10.50 to $11.75,
    What was the percent of increase to the nearest percent?

  87. my salary is 30 000 vatu in 2 weeks, the government wants to increase in 22%. how much do I have in 2 weeks?

  90. I am making $24 an hour and now will be making $57,000
    What would the pay increase be in a percent for this?

  91. My current basic salary is 20120 n i got an increment of 6% ….now what is my basic salary? ?

  94. I get paid 10.00 hourly and will be receiving a 4% raise how much will I be making hourly now

  95. we had an increase in pay of 2.3 % of our 18.00 hourly . what is this toatsl unsure of mine thank you

  97. i get paid 10 now but i got an offer with another company offering me 25 how much percentage increase is that?

  102. If I start with $50,000 annual salary, and receive a 4% per year pay raise, what will I be earning after 16 years?

  103. I only make 9.25 hr. My job wants me to enroll into my 401k, is that something i should do? And how much would 6% of my pay will that be?. I’m lucky to get 30hrs a week right now until summer gets here, but even if i do get 40hrs in a week how much will that be then in my 2 week pay?.

    1. You will Multiply $13.50 X .195 to get your pay increase. 13.50 X .195 = $2.63 pay increase. $13.50 + $2.63 = $16.13/hr

    1. You would multiply your annual salary by the decimal value of 2% (0.02). 35,000 x 0.02 = 700. This is a $700 increase of your annual salary. 35,000 + 700 = 35,700 annually.

  106. Hi,
    I make $23.95 per hour and I got offer $5000 increase in a year. How much increase will that be per hour?

    Thank you,
    Silvia

    1. Hi Silvia. Assuming you work the expected 2080 hours a year, and with $23.95/hour, you make about $49,816 ($23.95 x 2080 hours= 49,816) without a tax decrease. Now, all you have to do is add your annual income to your increase. $5,000 + $49,816= $54,816 a year without a tax decrease.

    1. If that is the case, you will multiply the decimal value of 4% by 31.95. 0.04(raise) X 31.95(current hourly pay) = 1.278 Increase. Add the increase to your current wage and you will get 32.228 per hour

    1. If you spread out 4.5% over 5 months, you will get about a 0.5% raise every month for 9 months. For example, let’s say you’re getting paid $10 an hour and you want to know how much you’ll be making next month with your 0.5% raise. You will multiply $10 by 0.005 (the decimal value of 0.5%), and you get a total of 0.05. This means next month you will get paid $10.05.

    1. Hi, you will need to multiply your hourly wage by the decimal value of 15%, and then add the total to your current hourly wage. $20.00 X .15= $3.00 increase. $20.00 + $3.00 = $23.00 per hour

  110. Hi. Can someone help me calculate this average hourly rate for me please:

    Salary: $80,000.00
    Hourly rates: $28, $22, $22, $18, $20, $12, $12, $12, $15, $15, $12
    Average hourly rate:

    1. First off, the hourly wage for an employee who earns $80,000 a year is ~$38.46 per hour. The average of the hourly rates you provided are calculated by adding all of the numbers together and dividing the total by the amount of digits you provided. 28+22+22+18+20+12+12+12+15+15+12= 188. 188/11= 17.09. The average hourly rate is $17.09.

  111. So Much informative i would like to prefer to read this content because it is so much informative.
    Thanks

  112. u people don’t even know what you u are even talking about all y’all did was calculate it and payed someone to get the answer for you little kids

    1. First, you need to multiply your currently hourly rate by the decimal value of the percentage ($7.20 X 0.25= 1.8). Then, add the value to your hourly wage ($7.20 + 1.8= $9.00). Your new hourly wage is $9.00 an hour.

  114. If I have an increase of 3.1% on my raise and it is now 8.00 dollars what was my previous salary

    1. First, you’ll need to multiply your current hourly wage by the decimal value of your raise ($8.00 X 0.031= 0.248). Next, you’ll subtract the new decimal value from your current hourly wage ($8.00 – 0.248= 7.752). Your previous hourly wage was $7.752/hour

  115. After receiving a rise of 5% of my previous wages.i now earns $800. What will be my previous wage?

  116. I make 13.51 a hour and got a one lump sum of 203.73 for the year how much do I make now???

News & Tips for Small Business Owners, Employees, and Accounting Professionals

Introducing Timesheets.com

We Help Thousands of Employers Manage Time, Time Off, and Expenses

Learn More

5 Most Popular Articles of the Last 24 Hours

Timesheets.com is trusted by small businesses everywhere as a recognized industry leader