What is a good raise percentage?

In 2026, the typical raise is 3-5%. Cost-of-living adjustments (COLAs) typically run 2.5-3.5% to match inflation. Merit raises for strong performance range from 4-8%. Promotions may carry 10-20%+ increases. The key is to negotiate above the median to achieve real purchasing power growth.

How do I negotiate a salary raise?

Successful negotiation requires preparation: (1) Document your achievements with quantifiable metrics (revenue, cost savings, efficiency gains), (2) Research market rates for your role using Glassdoor, Payscale, or industry surveys, (3) Timing -- schedule discussions after successful project completion or during annual reviews, (4) Practice your pitch, focusing on value you create rather than personal needs, (5) Be ready to negotiate non-salary items (PTO, remote work, equity) if base pay is constrained.

Should I accept a raise or look for a new job?

It depends on your current compensation and the offer. Internal raises average 3-5%, while job changes typically result in 10-20% salary increases. However, job changes involve transition costs (loss of tenure, benefits gaps, learning curves). A good rule: if internal raise is below market rate for your skills and you have strong performance data, explore both options simultaneously.

What is the difference between a raise and a bonus?

A raise permanently increases your base salary and compounds annually. A bonus is typically one-time (though some are recurring) and does not increase base pay. Raises have greater long-term value because they affect retirement contributions, life insurance, and other benefits tied to base salary. Bonuses can be valuable but should not be confused with permanent compensation increases.

How does compounding work with annual raises?

Compounding means each raise builds on the previous increased salary. For example, a $50,000 salary with 4% annual raises becomes $52,000 after year 1, $54,080 after year 2, $56,243 after year 3, and so on. After 10 years, the salary would be $74,012 -- a 48% increase. The compounding effect means early career raises have the largest impact on lifetime earnings.

What raises taxes more -- a raise or a bonus?

Both are taxed as ordinary income. The key difference is timing: raises are spread across the year (affecting each paycheck's withholding), while bonuses may be taxed at a flat supplemental rate (typically 22% for federal). A $5,000 bonus may have $1,100 withheld (22%), while a $5,000 raise spread over 26 bi-weekly paychecks increases each check by about $192 before taxes.

How does my raise compare to inflation?

Your raise must exceed the inflation rate (about 3.1% in 2026) to represent real purchasing power growth. A 3% raise with 3% inflation means your real income stays flat. A 5% raise with 3% inflation gives you 2% real growth. Use this calculator's insights to see whether your raise beats or trails inflation.

What total compensation factors should I consider?

Beyond base salary, evaluate: health insurance (employer contributions can be worth $3,000-$8,000/year), 401(k) match (free money, typically 3-6% of salary), paid time off (PTO at your daily rate), equity/RSUs, tuition reimbursement, life insurance, disability insurance, and any other benefits. A $100,000 base with 5% 401(k) match is worth more than a $105,000 base without one.

Raise Calculator

A raise calculator is a free online tool that shows exactly how much a salary increase is worth in both the short term and over your entire career. It calculates your new salary, the raise amount, monthly and weekly increases, and the total lifetime earnings boost. Free, no sign-up required.

Raise Details

Current Salary?Enter your current salary.

Raise Percentage?The percentage increase in your salary.

Years at Company

End of inputs

Raise Impact Analysis

New Salary

$84,000.00

After raise

Raise Amount

$4,000.00

Per year

Lifetime Increase

$20,000.00

5 years

Monthly Increase

$333.33

Per month

Weekly Increase

$76.92

Per week

Raise Percentage

5.00%

Annual increase

Current: $80,000.00/yr. Raise: 5.00% = $4,000.00/yr. New salary: $84,000.00/yr. Over 5 yr: $20,000.00 total increase.

Salary Comparison

Key Insights

If you receive this 5.00% raise annually for 5 years, your salary would compound to approximately $102,102.53. The compounding effect of consistent above-inflation raises is one of the most powerful wealth-building tools available. Even small annual raises add up dramatically over a career.

Your 5.00% raise exceeds the 2026 inflation rate of 3.10%. This represents real purchasing power growth. The additional $4,000.00 annually can be saved or invested to build wealth faster.

Your 5.00% raise meets or exceeds the median 2026 raise of 4.00%. This is a solid outcome. Your new salary of $84,000.00 reflects steady career progression. Consider whether your total compensation (benefits, equity, PTO) is also competitive.

For a 5.00% raise, frame the conversation around your impact rather than personal needs. Present 3-5 bullet points of recent wins. Reference market data for your role and experience level. Timing matters: schedule the discussion after successful project completion or during annual review cycles.

Your new salary of $84,000.00 is solid. Compare total compensation packages, not just base pay. An employer matching 5% of your 401(k) effectively adds $4,200.00 annually. Health insurance savings and PTO also have significant cash value.

Guide

How to Use This Calculator

1Enter your current annual salary.
2Enter the raise percentage you are considering or negotiating.
3Enter how many years you expect to stay at the company.
4The calculator shows your new salary, one-time raise amount, monthly and weekly increases, and total lifetime earnings impact.
5Review the AI insights for market comparison, negotiation tips, and compounding analysis.
6Adjust the raise percentage to model different negotiation outcomes.
7Compare the raise against inflation and median benchmarks.
8Use the insights to prepare for salary negotiations or evaluate a job offer.

Formula

How It's Calculated

Raise Impact Calculation:

newSalary        = currentSalary x (1 + raisePercent)
raiseAmount      = currentSalary x raisePercent
monthlyIncrease  = raiseAmount / 12
weeklyIncrease   = raiseAmount / 52
lifetimeIncrease = raiseAmount x yearsAtCompany

Compounding projection (annual raises at same percentage):
projectedSalary[n] = currentSalary x (1 + raisePercent)^n

Example: $80,000 salary, 5% raise, 5 years at company
  newSalary       = $80,000 x 1.05 = $84,000
  raiseAmount     = $80,000 x 0.05 = $4,000
  monthlyIncrease = $4,000 / 12 = $333.33
  weeklyIncrease  = $4,000 / 52 = $76.92
  lifetimeIncrease = $4,000 x 5 = $20,000
  Compounded salary after 5 years: $80,000 x 1.05^5 = $102,102

2026 benchmarks:
  Median merit raise: 4%
  Cost-of-living adjustment: 3.1%
  Federal poverty line: $15,060/year (single)
  Median household income: ~$75,000/year

Glossary

Key Terms

FAQ

Frequently Asked Questions

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