Pay Raise Calculator

Multiply your current salary by the raise percentage and add it: a 5% raise on $60,000 is $3,000, giving $63,000. To go the other way, subtract the old salary from the new one and divide by the old one — that gives the percentage. The part worth calculating is the third step, though: what the raise leaves after tax. On that $3,000 raise a single filer in a no-income-tax state keeps about $2,411, which is 80.3% of it.

Between roughly 60% and 80%, depending on your bracket and your state. A raise is taxed at your marginal rate, not your average one, so it is always taxed more heavily than your salary as a whole. Every dollar of it also pays 6.2% Social Security (until your wages pass the annual cap) and 1.45% Medicare. That is why a raise nearly always feels smaller in the check than the percentage suggested — the arithmetic is right, the expectation was wrong.

Three things compound. First, the raise is divided across your pay periods, so an annual figure that sounds substantial becomes a modest per-check number — $3,000 a year is $115 per biweekly check before tax. Second, it is taxed at your marginal rate. Third, if your benefit contributions are a percentage of pay, those rise with the raise too. Check the pay stub against the guide to reading one if the figure still looks wrong.

No. This is the most persistent myth about raises. Brackets are marginal: only the portion of income above a threshold is taxed at the higher rate, and the income below it keeps its old rate. Crossing into a higher bracket never reduces your take-home pay. What can genuinely cost you is an income-tested benefit or credit that phases out at a threshold, which is a separate effect from the bracket itself and usually much smaller than the raise.

Cost-of-living adjustments typically track inflation, so a raise below the CPI increase is a real-terms pay cut even though the number went up. Merit increases sit above that, and promotions or job changes are usually where the larger step changes happen. The number that matters when comparing offers is net, not gross, because the same gross raise is worth measurably different amounts in different states — the comparison table on this page shows the spread.

If your contribution is set as a percentage of pay, it rises automatically with the raise, so a slice of the increase goes into the plan rather than your account. That is not money lost, but it does mean the take-home rise is smaller than this calculator shows if you have a percentage election. Because traditional contributions are pre-tax, routing part of a raise into the plan also lowers the tax on it. The 401(k) paycheck calculator quantifies both effects.

Usually not for the raise alone. Payroll recalculates withholding automatically from the new pay rate each period, so the withheld amount adjusts by itself. Where a check is worth doing is if you have multiple jobs, significant non-wage income, or the raise was large enough to change your expected bracket, since those are the cases the default W-4 calculation handles least well.

Not in how it is withheld. A raise is folded into your regular pay and withheld through the ordinary tables. A bonus is usually treated as supplemental wages and withheld at a flat 22%, whatever your bracket. Both end up taxed at your ordinary rates when you file, so the difference is timing, not the final bill.