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Business Math: How to Calculate Pay Raise by Percentage

When it’s time for the annual performance review or annual raise, you need to know how to increase your employee’s pay correctly.

Generally, you will want to increase their pay by some percentage. The national average pay increase was expected to be 3% for 2013. The trend is to reward top performers with a higher than average pay raise and average workers with lower pay raises.

Calculating the Percentage

We talked about percentage yesterday, in the post about calculating sales tax. Now we’ll relate percentage to pay increases. When your employee is ready for a pay increase, decide what percentage is fair and then do the following calculation:

(current rate)(percent increase)=(increase)

Step 1: Convert the percentage into decimal form

You need to convert the percentage into a real number that you can use to multiply by the employee’s current pay rate. To do this, simply move the decimal two places to the left. For a 3% increase, you will use .03

Step 2: Multiply the employee’s current pay rate by that decimal

If your employee makes $15/hour, then you have: 15x.03=.45. So your employee’s increase is 45 cents per hour. For an employee who makes a salary of $45,000/year, then you have: 45,000x.03=1,350. So your salaried employee’s pay increase is $1,350 per year.

Why You Have to Convert the Percent

The percent symbol is used to tell you something about the number it sits beside. Percent means ‘parts per hundred’. So if a % sign sits beside a 3, it really means 3 parts per 100. You don’t need to know this to calculate a pay increase but it might help you to understand why you need to convert the percent into decimal form to begin with. 3% tells us we need to multiply our pay rate by 3 pieces of a hundred.

Do you remember what the decimal places mean? The first decimal place is the tenths place and the second is the hundredths place. This is why when we convert our percent we have to move two places – we have to open up the hundredths place.

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  1. Kathy white
    Kathy white September 10, 2015

    Can you tell me I currently make 10:50 dollars an hour just got 3% pay raise what will my new hourly wage be.

    • Peggy
      Peggy September 11, 2015

      Sure Kathy. I can help you. Find 3% of $10.50 per hour by multiplying 10.5 by .03. That equals .315. So your new hourly wage will be $10.50 + .315 = $10.815

      • Idella
        Idella January 1, 2017

        I am getting a 2% raise at 11.35.57 an hour.this will be retro from November much is this?

      • Rhonda
        Rhonda March 25, 2017

        Hi, if i get pay increase of 2 % on $37K salary a year then how much will I make at the end of 5 years at 2% annual increase?

  2. Beverly
    Beverly April 21, 2016

    I make 9.76 anf gonna get a 2% raise how much will I make

    • April 26, 2016

      Hello Beverly. Multiply your hourly rate by .02 and you get 19 cents. So your new hourly rate will be $9.95 per hour.

  3. johnny
    johnny June 15, 2016

    i need to figure the equation differently. at an increase of $.48 with a 3.5% increase what is the rate of pay before ?

    • June 15, 2016

      Hi Johnny,

      We can just plug in what we know to the formula and solve. Rate(%) = increase

      R(.035) = .48

      Now divide both sides by .035 to get R = .48/.035

      R = 13.71

  4. shana
    shana July 10, 2016

    Hi if I make 19.28 HR and I got a 1.2% raise who much would I be making a hr

    • July 21, 2016

      Hi Shana,

      You’ll be making 23 cents more per hour so that will bring your hourly rate up to 19.51.

  5. Sarah
    Sarah July 29, 2016

    Hi I make $9.75 an hour and got a 1% pay raise. How much would that be?

    • August 4, 2016

      Hi Sarah,

      That would be a 9 cent raise.

  6. Nia
    Nia August 15, 2016

    So, a 3% increase from 3189 would be $95.67. Is that correct?

    • August 23, 2016

      That is correct.

  7. Chanel
    Chanel August 22, 2016

    I make 10.25 and I just got a 25% raise how much will I make

    • August 23, 2016


    • Dorcel
      Dorcel December 21, 2016

      You would make 12.81.

      10.25 x .25= 2.5625, round that off to 2.56

      2.56+ 10.25= 12.81

  8. Suzane
    Suzane August 25, 2016

    Get paid $15.25 what is 18% raise?

    • August 29, 2016


  9. Lisa Canales
    Lisa Canales August 29, 2016

    Hello I make $16.50 an hour and I just got a $80.47 (3.0%)per month raise. How much will my new hourly pay be?

  10. Becca
    Becca September 3, 2016

    Currently paid $9.00 and my shift difference is.75 geting a 2% raise how much is that??

  11. Gina
    Gina September 7, 2016

    18.00 per hour for a 5% increase is?

  12. Lisa
    Lisa September 19, 2016

    Hello I make$14.90 a hour and will receive at 7.5% raise what will I make more?

  13. Luke
    Luke September 28, 2016

    Write a blog post showing how to calculate a pay rise – get a comment section full of people asking you to do it for them. Gotta love the internet!

  14. Dana
    Dana October 6, 2016

    If I have a 10% increase of 9.25 what will my new pay be ?

  15. Kathleen Washington
    Kathleen Washington October 7, 2016

    Hi if I make 11.18 and I’m getting a raise for 3.5 percent how much will I be making

  16. Liz bell
    Liz bell October 22, 2016

    if i received 824.00 a month and I’m getting an 3.0 percent increase in Jan what will i be getting each month

  17. Kay
    Kay October 25, 2016

    How do I figure 1.5% less per month. This year I am making 2018.30. I need last years figure.

    • Peggy Emch
      Peggy Emch October 29, 2016

      Hi Kay,

      This problem is a little different. Writing out the problem in words should help it make sense. 1.5% of your old salary was your raise last year so we are going to add that to your old salary to get your new salary.

      (old salary) + 1.5%(old salary) = new salary

      Let’s call the old salary x since we don’t know that value. And we’ll write 1.5% as a decimal to get:

      x + .015x = 2018.30

      Combine terms:

      1.015x = 2018.30

      Solve for x:

      x = 2018.30/1.015

      x = 1988.47

      Last year’s salary was $1988.47

  18. Ingrid Harris
    Ingrid Harris October 25, 2016

    If I make 22.77 an hour and got a 3% increase how much will that be??

  19. Mardie
    Mardie November 9, 2016


    If I make 19.25 hr an 2.250 percent change would have my hourly rate at what amount?

  20. Curt
    Curt November 28, 2016

    I have an employee who makes $13.00 per hour. I want to increase her hourly rate to $15. What percentage of increase am I giving her

    • Peggy Emch
      Peggy Emch November 29, 2016

      Plug in your numbers to the equation to get 13x=2.
      Divide both sides by 13 to get .15
      So it’s a 15% raise.

      • AH
        AH April 19, 2017

        What is the increase if you go from $13.25 to $13.75?

  21. Bryan Kano
    Bryan Kano November 30, 2016

    I make $53,610.00 per year, next year I am slated to receive a 26.03% increase. How much would my new annual salary be?

  22. Angelita Rivera
    Angelita Rivera December 8, 2016

    If I make $11.43 and I’m getting a 4% raise, what will my new pay be?

  23. Eboni Weakley
    Eboni Weakley December 10, 2016

    I make $9.50 a hr and got a 2% raise how much is that

  24. Chad
    Chad December 15, 2016

    Hello i make $9.00hr and just got a 2.5% raise how much would i be making on the hour now?…. Thanks!

  25. Kathy
    Kathy December 18, 2016

    I make 15.49 an hour and getting a 2.1% raise. What will my new hourly rate be.

  26. Tom
    Tom December 19, 2016

    Morning, I make 35.80 and hour, my increase is 2%, however my multiplyer is 3%. I’m not sure when/how I calculate the 3%. Is it 3% increase if my 2% raise? Thnx Tom

  27. Alexis
    Alexis December 20, 2016

    Hello I have a question if I make $15.12 an hour and my job is giving us a 9.5% wage increase how much money is that?

  28. Liam
    Liam December 20, 2016

    I make 15.00$ and i got a 4% pay increase what do i make now.

  29. Diana Vaughn
    Diana Vaughn December 23, 2016

    Can you help me if I was getting 10.62 a hour a now it’s say 10.830 a hour I much raised they gave me

  30. quita
    quita January 1, 2017

    I make 10.75/hr Sunday thru Thursday and make 11.25/hr Friday and Saturday I’m receiving a 2% raise how much will my pay be

  31. Anthony
    Anthony January 3, 2017

    Whats my pay raise by percentage rate. I made 21.00 hr and now I make 21.75 an hr . Whats my percentage of pay raise? I made 48,000 yeár salary/ bonuses included. Need to find out next years estimated salary…Please .

    • Peggy Emch
      Peggy Emch January 5, 2017

      Hi Anthony,

      That’s about a 3 and a half percent raise.

  32. Jay
    Jay January 6, 2017

    Hello I got a 7.5% pay increase and I get paid 17 an hour. Would that equal $18.27? Thank you for your help.

  33. Angela
    Angela January 6, 2017

    I’m getting a 10% increase I’m making 8.45 a hour

  34. Roxanne
    Roxanne January 18, 2017

    I am getting a 14.9% raise. I currently make 12.00. Then I will be getting the same raise 3 more times.

  35. missyazzyrose
    missyazzyrose January 18, 2017

    I make $15.45 an hour & getting a raise to 6.6% how much will that be?

  36. Kristine G
    Kristine G January 19, 2017

    If the raise is based on CPI how do I know how much the raise? CPI is 2.1%

  37. Kayla
    Kayla January 24, 2017

    I am getting a 2.5% raise at 11.00 an hour how much is that

  38. Deveon
    Deveon January 28, 2017

    lol you explain how to do it yet people ask you ……yet they can do it themselvs……….lol

  39. Swooze
    Swooze February 3, 2017

    I have a contract that states that I my increase of CPI cannot be more that 3.5%. Last years CPI .7 and this years CPI is 2.1. My fee last year was $1.12. So the most I can increase would be $1.12 * .035 = .0392 = .39 cents?

    So last years fee was $1.12 and I would increase by the maximum of .39 = 1.51?

  40. Matt
    Matt February 18, 2017

    Hey just to make sure when you calculate your hours by how much you get an hour you use multiplication right?

    • Peggy Emch
      Peggy Emch February 22, 2017

      Right. Hours x pay rate = pay.

      • Casey
        Casey March 3, 2017

        Hey im makeing $10 per hour and im post to get a raise of 20% what is it

  41. Lamarra
    Lamarra February 22, 2017

    If I make $16 an hour and I got a 3,000 dollar a year raise, what is my new hourly rate?

  42. Michael Johnson
    Michael Johnson February 23, 2017

    It’s funny to see that this article tells you the EXACT steps on calculating your hourly/monthly/yearly earnings yet almost EVERY single comment is “how much will I make if … “.

    Do people read anymore?!?!

    • Peggy Emch
      Peggy Emch February 28, 2017


  43. Jeffery Cummings
    Jeffery Cummings February 23, 2017

    What is the formula to find out how many years it will take to get to 30.00 p/hr if I get a standard 2% raise every year.

  44. John Hallahan
    John Hallahan March 16, 2017

    Hello Peggy,
    I make $3068.00 a month. how much will that increase with a .03% increase?

  45. Mari
    Mari March 18, 2017

    Very helpful. Thank you ever so much.

  46. Kevin Luck
    Kevin Luck March 18, 2017

    Sorry, not sure if I’m doing this right because I’m not leaving a reply but would like to make new post.

    Math & I have never been good friends.

    I was making $18 an hour but now make $24 an hour getting a new job.

    Would a percentage increase be %24 or %2.4?

    Thank You

    • Peggy Emch
      Peggy Emch March 30, 2017

      Hi Kevin,

      Your dollar increase is $6 so your percent increase is .33333.

  47. Eddy
    Eddy March 20, 2017

    Whats the 6% increase of 15 dollars?.

  48. Micheal Blane
    Micheal Blane March 23, 2017

    my salary is $45,000 im getting an 2.5% raise. What will my salary look like?

  49. Tommy
    Tommy March 24, 2017

    I make 95,000 a year before bonuses. I am to receive a .2% raise. Would that be 95000x.02? and what that equals would be divided over the year ?

    • Peggy Emch
      Peggy Emch March 30, 2017

      Hi Tommy. Yep. Add 1900 to your 95000 and then divide that by however many paychecks you get.

  50. J
    J March 29, 2017

    Thanks for breaking down the ‘why’ helps people who don’t like math to understand and comprehend

    • Erica
      Erica April 5, 2017

      Hi. I just got promoted from 14.85 to 15.11. How much is that raise?

      • Peggy Emch
        Peggy Emch April 6, 2017

        15.11-14.85=.26. Your raise was 26 cents, which is a 1% raise.

  51. craigy k
    craigy k April 7, 2017

    Hi, I make 40K a year and just got a 3% bump. How much do I make now?

  52. Marie D.
    Marie D. April 11, 2017

    Great demonstration!

  53. Maria
    Maria April 12, 2017

    I get 1% of my salary for each year that I work. So if I work 35 years I will get 35% of my salary. What if I work 35 years, and eight months would that be 35.8 percent of my salary?

    • Peggy Emch
      Peggy Emch April 13, 2017

      It’s not this simple. You need to use the compound interest formula to get an accurate number. For example, if you make 20,000 per year, your first raise will be $200. The next year your raise will be $202 and the next it will be 204.02 and so on.

      • Isauro Valdez
        Isauro Valdez April 13, 2017

        Hi Peggy,

        Just want to say you have done a fantastic job on the way you have taken the time to respond and assist everyone that had a question. Awesome job!

  54. joe
    joe April 26, 2017

    i ushally get 17 an hour and im offered a 10 percent raise what is my new payment

  55. Veronica
    Veronica April 27, 2017

    Can you help me I get paid 21.00 dollars an hour they raise 10% more how much am I gonna make now

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