Calculate Salary Increase Percentage: Formula & Examples
Learn the salary increase percentage formula in three directions, with annual, monthly, hourly, and pay-cut examples.
By Salary Increase Calc editorial team • Reviewed by Salary Increase Calc editorial team on August 4, 2026
To calculate salary increase percentage, subtract old pay from new pay, divide the difference by old pay, and multiply by 100. The old salary belongs in the denominator. For $50,000 to $55,000, the calculation is ($5,000 ÷ $50,000) × 100 = 10%.
Old pay and new pay to percentage
Use this when you know both salaries:
((new pay − old pay) ÷ old pay) × 100
An annual salary moving from $60,000 to $63,000 has a $3,000 difference. Divide $3,000 by $60,000 to get 0.05, then multiply by 100. The raise is 5%.
The same formula works for monthly or hourly pay if both values use the same period. Monthly pay moving from $4,000 to $4,200 is 5%. Hourly pay moving from $20 to $21 is also 5%.
Current pay and percentage to new pay
When you know the current amount and the announced percentage:
new pay = current pay × (1 + percentage ÷ 100)
A 3% raise on $50,000 is $50,000 × 1.03 = $51,500. The annual increase is $1,500. A 10% raise on $75,000 produces $82,500 and adds $7,500.
New pay and percentage to original pay
When you know the new pay and the raise percentage:
original pay = new pay ÷ (1 + percentage ÷ 100)
If new pay is $52,500 after a 5% raise, divide $52,500 by 1.05. The original salary was $50,000. Do not simply subtract 5% of the new salary; the percentage was applied to the old base.
Hourly example
An hourly rate rising from $25 to $26 increases by $1. Divide $1 by $25 to get 0.04, or 4%. At 40 hours per week for 52 weeks, the annualized pay rises from $52,000 to $54,080, a $2,080 increase.
Pay-cut example
The formula also handles negative changes. Pay moving from $50,000 to $47,500 changes by −$2,500. Divide by $50,000 to get −0.05, or −5%.
Common mistakes
- Dividing by new salary instead of old salary.
- Comparing different pay periods, such as monthly old pay with annual new pay.
- Treating biweekly and semimonthly pay as the same; one is usually 26 payments and the other is 24.
- Rounding each step before the final answer.
- Showing Infinity when old pay is zero. In that case the percentage is not defined.
Use the Salary Increase Percentage Calculator to enter any two values and solve the third.