How to Calculate a Raise from Old and New Salary

If you know your old salary and new salary, the raise amount is the difference between them.

Salary Increase Formula

new salary - old salary = raise amount. Raise amount / old salary x 100 = raise percentage.

Example Calculation

How to Calculate Raise Percentage from Old and New Salary

Divide the raise amount by the old salary and multiply by 100.

How to Calculate New Salary from Raise Percentage

Use the salary increase calculator to reverse the math from percentage, amount, or new salary.

This method is helpful when your employer gives you only the new salary in an offer letter, promotion letter, or annual review. It turns the new number into a raise amount and percentage so you can compare it with estimated inflation and your expectations.

Be careful to compare annual salary with annual salary. If one number is monthly or hourly, annualize it first. For connected examples, read salary increase percentage formula, how to calculate salary increase percentage, and monthly pay after a raise.

Step-by-Step Method

Start with the old salary. Write it down exactly as an annual number. Then write down the new salary. Subtract the old salary from the new salary. The result is the raise amount. Finally, divide the raise amount by the old salary and multiply by 100 to get the raise percentage.

For example, if your old salary was $70,000 and your new salary is $73,500, the raise amount is $3,500. Divide $3,500 by $70,000 and multiply by 100. The result is 5%. That means the new salary is 5% higher than the old salary.

Why Old Salary Is the Base

The old salary is the base because the raise measures how much pay increased from the starting point. If you divide by the new salary, the percentage will be lower and will not describe the raise correctly. This is a small formula detail, but it can change the answer enough to confuse a compensation conversation.

Use the same principle if you are comparing hourly rates. Convert the old hourly rate and new hourly rate into the same time period, then calculate the increase against the old number. The calculation should describe the change from the old pay to the new pay.

What to Do With the Answer

Once you know the raise amount and percentage, decide what question you are trying to answer. If you want to budget, monthly or biweekly pay may matter more. If you want to judge purchasing power, compare the percentage with estimated inflation. If you want to prepare for a discussion, compare the percentage with responsibility changes and your target.

Do not treat the formula as a script for negotiation by itself. It is evidence, not the whole case. A professional conversation still needs context: what changed in the role, what results you delivered, what timing makes sense, and what number you are asking to discuss.

Common Scenarios

You may use this calculation after receiving a promotion letter that lists only the new salary. In that case, the raise amount and percentage help you decide whether the promotion pay matches the additional responsibility. A title change with a small percentage increase may deserve a follow-up question.

You may also use it after an annual merit increase. If the role did not change much, the percentage can be compared with estimated inflation and your company's normal review cycle. If the raise is close to estimated inflation, it may be more of a maintenance adjustment than a major increase.

The same calculation helps when comparing job offers. If a new employer offers a salary above your current salary, calculate the percentage increase, then look at benefits, bonus, commute, flexibility, and risk. A higher salary can be attractive, but base pay is only one part of the decision.

How to Explain the Result

When sharing the result, keep it simple. "My old salary was $70,000 and the new salary is $73,500, which is a $3,500 or 5% raise" is enough. You do not need to show every formula step unless someone asks.

If you are preparing for a raise conversation, connect the result to what changed in the job. "The raise is 5%, and I wanted to discuss how that lines up with the additional responsibilities I now own" is clearer than a broad complaint. It gives the manager a specific compensation question to answer.

Use the Salary Increase Calculator

Want to calculate your own raise?

Use the Salary Increase Calculator.

FAQ

How do I calculate a raise from old and new salary?

Subtract the old salary from the new salary to get the raise amount, then divide that amount by the old salary and multiply by 100.

What if my pay is hourly instead of salary?

Convert hourly pay to an annual estimate first, then compare the old annualized pay with the new annualized pay.