Pay Raise Calculator

How the Pay Raise Calculator: What a Raise Is Worth After Tax Works

A raise of 5% does not add 5% to your take-home pay. The extra income is taxed at your top bracket, which is usually higher than your average rate, and it also bears Social Security, Medicare and state tax. This pay raise calculator shows what a raise is really worth after tax, so you can compare offers, prepare for a salary negotiation and budget the new income.

Enter your current salary, the raise percentage, your pay frequency, filing status and a state tax rate. The result shows the net raise per year, per paycheck and per month, and the share of the raise you keep.

Why you keep less than the raise

Your raise is your top slice of income, and it is taxed at your marginal rate. A single filer earning $65,000 has a taxable income of $48,900 after the $16,100 standard deduction, which is in the 12% bracket. A raise moves more income into that bracket and, past $50,400 of taxable income, into the 22% bracket. Add 7.65% for Social Security and Medicare and a state rate of about 5%, and the tax on the last dollars can be 35% or more.

So a $3,250 raise, which is 5% of $65,000, may add only about $2,270 to take-home pay for the year. Divided by 26 paychecks, that is about $87 more per check. This is not a mistake in the calculation. It is how the tax system works, and it is the same everywhere.

Nobody loses money because of a raise, despite a common myth that a raise can push you into a bracket where you earn less. Only the dollars above the bracket threshold are taxed at the higher rate.

Marginal rate versus average rate

The average rate is total tax divided by total income, and the marginal rate is the rate on the next dollar. A raise is taxed at the marginal rate. For 2026 single filers, the marginal federal rates are 10% up to $12,400 of taxable income, 12% up to $50,400, 22% up to $105,700, 24% up to $201,775 and higher after that. The married filing jointly thresholds are about twice as high.

Payroll taxes add a fixed 7.65% on wages up to $184,500, and 1.45% above that. High earners also pay an extra 0.9% Medicare tax above $200,000. State income taxes range from zero to more than 10%, and some cities add their own taxes.

To see your marginal rate, use the federal income tax calculator on this site or compare the take-home pay before and after the raise in this calculator.

How to compare job offers and raises

When you compare a new offer with your current salary, compare take-home pay, not gross pay. A job in another state may have a lower or higher tax rate, and changes in commuting costs, health insurance premiums and retirement matching also affect the real value. Use the calculator for each salary and compare the net figure, and then adjust for the cost of living.

For a promotion, ask whether the raise includes a change in benefits. A higher salary may raise the cost of your share of health premiums or change your eligibility for certain credits. A bonus, equity or extra paid time off may be worth more than a small raise.

If your raise is a percentage, ask when it takes effect. A mid-year raise is worth less in the current year than a full-year raise, since only the remaining months benefit.

Worked example: $65,000 with a 5% raise

A single filer earning $65,000 gets a 5% raise to $68,250. Before the raise, taxable income is $48,900 and federal tax is about $5,600. After the raise, taxable income is $52,150 and federal tax is about $6,185, because the last $1,750 is taxed at 22%. Social Security and Medicare rise by about $249 and state tax at 5% rises by about $163.

The result is a net raise of about $2,270 for the year, or about 70% of the gross raise. Per biweekly paycheck that is about $87. If the filer had 401(k) contributions, the after-tax value would be a bit lower, since a percentage would go to retirement.

Try different percentages to see the effect. A 3% raise adds roughly $1,400 in take-home pay, and a 10% raise adds about $4,400 in the same situation.

How much raise should you ask for

Cost-of-living adjustments in recent years have usually ranged from about 3% to 4%, and merit raises often fall between 3% and 5%. A promotion commonly brings 8% to 15%, and a move to a new employer can bring more. Use current job postings for your title and location, salary surveys and your own record of results to pick a target figure before you ask.

Ask for a number, not a range, and use the calculator to show yourself what the net value is. A request for 8% on a $65,000 salary is $5,200 gross, which is about $3,500 after tax, or roughly $135 more per biweekly paycheck. Knowing that figure helps you compare it with other forms of compensation, such as a bonus, a signing payment or more time off.

Raises, inflation and real income

A raise below the inflation rate is a pay cut in real terms. If prices rise 3% and your pay rises 2%, your purchasing power falls by about 1%. When you evaluate a raise, compare it with the inflation rate over the same period, and remember that the after-tax gain is smaller than the pre-tax gain. Over several years, regular raises that only match inflation keep your buying power constant, and raises above inflation improve it.

Also consider the effect on benefits that use salary, such as life insurance, disability insurance and retirement contributions with employer matching. Some of these grow automatically with pay, which adds value beyond the paycheck.

Cost-of-living versus merit raises

A cost-of-living adjustment is meant to keep your purchasing power steady against inflation, not to increase your real standard of living, so a 3% raise in a year with 3% inflation leaves you no better off in real terms, even though the paycheck number went up. A merit raise, on the other hand, is meant to reflect increased value or performance beyond just keeping pace with prices.

When negotiating, ask whether a proposed raise is intended as a cost-of-living adjustment, a merit increase, or both combined, since that context helps you judge whether the number reflects your actual contribution or just standard inflation adjustment that most employees receive automatically.

Raises and benefits that scale with salary

Some benefits automatically increase with your salary: employer-provided life insurance is often set at a multiple of salary, so a raise can increase your coverage at no additional cost. A 401(k) match calculated as a percentage of salary means a raise increases the dollar amount of matching contributions too, assuming you maintain the same contribution percentage.

On the other hand, a raise can push you past an income threshold for certain benefits or subsidies, such as marketplace health insurance premium tax credits, so if you're near a cliff for a specific program, it's worth checking the exact threshold before assuming a raise is purely beneficial with no tradeoffs.

Using your raise wisely

Decide in advance what to do with the extra money. A common approach is to send at least half of the net raise to savings or debt payments before the increase is absorbed into daily spending. If your employer matches 401(k) contributions, increasing your contribution percentage when you get a raise can raise the match and lower your taxable income.

Review your Form W-4 after a big raise, since higher pay may need different withholding, particularly if a spouse also works. Update your budget with the new take-home pay per paycheck, not the gross figure.

If the raise is small, ask about other forms of value, such as a flexible schedule, remote work, education support or a higher employer contribution to retirement or a health savings account.

How to use this calculator

Enter your current salary and the raise percentage. Choose your pay frequency to see the per-paycheck effect, your filing status and a flat state tax rate. Pre-tax deductions are not included, so your actual paycheck can differ. Use the result as a planning number for negotiating, budgeting and comparing offers.

Pay Raise results at a glance

These are the calculator's results at different values of current annual salary, with every other input left at the example values above (the bold row is the example). Use them to see how quickly the result changes before entering your own numbers.

How pay frequency changes the result

The same example with each pay frequency option:

How filing status changes the result

The same example with each filing status option:

The same example at different state tax rates

State income tax is the input that varies most between readers. Nine states charge 0% on wages, flat-tax states charge one rate, and progressive states charge more at higher incomes. Here is the example at five effective state rates; for your exact state rules, use the state paycheck calculators.