What is a good pay raise percentage?

In the US, typical annual merit raises run 3–4%, with 5%+ usually reserved for promotions or hot job markets. Anything at or below inflation (often 2–3%) is effectively a pay freeze in purchasing power. When evaluating an offer, compare the percentage against inflation, not against zero.

How do pay raises compound over time?

Raises multiply on top of each other. A 3% raise every year for 10 years grows pay by a factor of 1.03^10 ≈ 1.344 — a 34.4% total increase, not 30%. That's why early-career raises matter most: each one compounds on every raise that follows for the rest of your career.

Should I negotiate a percent raise or a dollar raise?

They're mathematically equivalent if you do the conversion — a $1.50 raise on $25/hour is exactly 6%. Percent is the standard language for salary negotiations and makes raises comparable across pay levels; dollar amounts are more concrete for hourly workers. This calculator converts both ways so you can speak either language.

Does a raise change my overtime rate?

Yes. Overtime is 1.5× your regular hourly rate, so a raise lifts your overtime pay too. A $25/hour worker raised to $25.75 sees overtime go from $37.50 to $38.63 an hour — an extra $1.13 per overtime hour on top of the base raise.

Is a 3% raise actually a raise?

Only if inflation is below 3%. If prices rise 3% and your pay rises 3%, your purchasing power is flat — you can buy exactly what you could before. A raise beats inflation only by the difference: a 4% raise in a 2.5% inflation year is a real 1.5% gain.

How often should I expect a raise?

Most US employers review pay annually, often tied to performance reviews. But the biggest raises rarely come from annual merit cycles — they come from promotions, job changes, and negotiated adjustments when your market value outgrows your pay. If it's been 18+ months, it's reasonable to start the conversation yourself.

Pay Raise Calculator

Calculate your new pay after a raise. Enter a percent or dollar amount and see your new hourly rate, annual salary, and exactly how much more you'll earn per month and per year — plus a reverse solver that tells you what raise you need to hit any target pay.

Current hourly rate ($)

Hours per week

Raise percentage (%)

Or raise amount ($/hr, overrides %)

Advanced options

Reverse solver: target pay ($/hr, 0 = off)

What raise % and $/hr would it take to reach this rate?

Work hours per year

40 hrs × 52 weeks = 2,080.

New hourly rate

$0.00

New annual salary

Extra / month

Extra / year

Old vs new pay

	Hourly	Weekly	Monthly	Annual
Increase

How it's calculated

Annual pay: before vs after

Reverse solver: what raise reaches your target?

Percent vs dollar raises

A 4% raise on $25/hr is $1/hr — $2,080 a year. The same 4% on $50/hr is $2/hr, or $4,160. Percentages compound with your base, so higher earners gain more dollars from the same percent. When comparing offers, always convert to annual dollars: a $2/hr bump beats a 3% raise once you're above about $32/hr at full time.

Negotiating with the reverse solver

Start from the lifestyle number, not the percent. If you need $30/hr to hit your budget, the solver tells you exactly what to ask for: the percent and the dollars. Asking for "a 5% raise" is vague; asking for "$1.50 more per hour to reach $30" is a concrete, defensible number.

Frequently Asked Questions

What is a typical annual raise?

In the U.S., merit raises average 3–4% in normal years. Promotions or job changes typically bring 10–20%+. Anything under inflation is effectively a pay cut.

How do I calculate a raise percentage?

(New pay − old pay) ÷ old pay × 100. Example: ($26 − $25) ÷ $25 = 4%.

Is a $1 raise good?

At full time, $1/hr = $2,080/year before taxes — meaningful, but compare it as a percent: on $25/hr it's 4% (solid); on $60/hr it's 1.7% (below inflation).

Should I ask for a percent or a dollar amount?

Dollars, tied to a target rate. "I'd like to get to $30 an hour" is clearer than "I'd like 5%," and it anchors the negotiation on your number.

Do raises apply to overtime too?

Yes — overtime is a multiple of your regular rate, so a higher base rate lifts OT pay proportionally. The annual figures above assume straight-time hours.