How to Calculate the Salary Percentage: A Comprehensive Guide

Salary negotiations, raises, and financial planning often involve understanding how to calculate the salary percentage. Knowing these figures inside and out is essential whether you're an employee looking for a raise or an employer planning your payroll. Recruitery will look at different circumstances and how to determine the compensation % in this article. From determining salary increases to finding your new salary after an increase, we've got you covered.

calculate the salary percentage

Caption: How to Calculate the Salary Percentage?

How to Calculate Salary Increase Percentage?

Calculating a pay raise or decrease is one of the most frequent situations in which salary percentages are used. This is a crucial component of yearly performance reviews and has a big impact on an employee's financial stability.

To calculate the salary increase percentage, use the following formula:

Salary increase percentage = (New salary - Old salary) / Old salary * 100

For example, if your old salary was $45,000, and your new salary is $50,000, the calculation would be:

Percentage Increase = [(50,000 - 45,000) / 45,000)× 100 = 11.11

This percentage represents the increase in your salary. In this case, your salary increased by approximately 11.11%.

How to Calculate Your New Salary If You Know the Hike/Increase Percentage?

Calculate Your New Salary

Conversely, you might want to determine your new salary if you're already aware of the percentage increase. This can be useful in negotiations or when budgeting for pay increases.

To calculate your new salary based on a known percentage increase, use this formula:

New salary = Current salary * Salary increase percentage / 100 + Current salary

For example, if your current salary is $60,000, and you've been offered a 15% salary increase, the calculation would be:

New Salary = 60,000 + [(15 / 100) x 60,000] = $69,000

Your new salary after a 15% increase would be $69,000.

Why You Must Calculate Salary Increase Percentage?

Calculating wage increase percentages is more than simply a math problem; it affects both employees and employers in the real world. Here are three justifications for why learning this ability is crucial:

1. Empowerment in Negotiations

As an employee, being able to calculate the salary increase percentage empowers you during salary negotiations. You can confidently assess the value of an offer and negotiate for a fair increase based on your performance and market standards.

2. Financial Planning

Knowing how to calculate salary increase percentages allows you to plan your financial future more effectively. You can budget, save, invest, and set financial goals with a clear understanding of how salary changes impact your income.

3. Employer Budgeting

Employers also benefit from understanding salary percentage calculations. It helps in budgeting for payroll expenses and ensuring that salary increases align with the company's financial objectives. This knowledge contributes to a balanced and sustainable approach to compensation.

5 Key Self-Reflection Questions Prior to Seeking a Salary Increase

 Key Self-Reflection

1. What makes me deserving of a hike?

It's critical to have a clear grasp of what qualifies you for a raise before approaching your employer with this request. Evaluate your performance and contributions to the organization over the course of some period. Have you consistently gone above and beyond your job description? Have you achieved specific, measurable results that benefit the company? Deserving a salary hike often involves demonstrating exceptional skills, dedication, and value to your employer.

Take into account your successes, such as achieving or exceeding performance goals, taking on new obligations, or managing initiatives that have benefited the company. The main things that can make you deserving of a pay raise are your efforts to improve your abilities, grow professionally, and support the development of the firm.

2. How long has it been since my last raise?

Timing is a critical factor when requesting a salary hike. You should consider when you last received a raise. Frequent requests for salary increases may be seen as unreasonable or pushy, so it's important to gauge the appropriate interval between hikes.

Typically, an annual review is a common time for discussing salary increases. However, there can be some instances that call for a more frequent review, such as exceptional performance or substantial changes in your role. Knowing when your last raise was will help you decide if now is the right time to request another one.

3. Is the timing right for requesting a raise?

Your request's timing is extremely important. It's not simply a matter of when you last received a raise; it also depends on how the business is doing financially and how the economy is doing overall. Find out if the company is currently experiencing good financial health or problems. During times of economic uncertainty, salary negotiations might be less fruitful. However, in a thriving economy or if the company is meeting or exceeding its goals, it could be a more favorable time to discuss a salary increase.

Additionally, consider how well your team or department is currently operating. If your organization is grappling with spending cuts or layoffs, it might not be the best time to request a raise. Your scheduling decision may have a significant impact on how well your negotiation goes.

4. How much of a salary hike do you deserve?

Determining the appropriate amount for your salary hike is crucial. Your expectations should be reasonable and backed by evidence. Initiate the process by delving into industry norms and salary comparisons for your specific position. Tools like salary surveys and websites that provide salary data can help you understand the typical compensation for your position in your location.

Take into account things like the cost of living in your area and any specific knowledge or credentials you may have that could support a higher pay. Your desired raise should be in line with the going wage for your job and the worth you provide to the company.

5. Have I sufficiently demonstrated my value to the company?

It's crucial to show the value you've brought to the company in order to support your request for a pay raise. Your contributions should be measurable and well-documented, whether they include boosting sales, cutting expenses, streamlining operations, or managing crucial initiatives.

Highlight specific accomplishments, mention any positive feedback or recognition you've received, and provide evidence of your contributions to the company's success. Showing that you've played a pivotal role in the organization's growth and profitability can significantly strengthen your argument for a higher salary.


Calculating the salary percentage is a valuable skill in various professional and financial contexts. Whether you're an employee seeking a raise, an employer managing payroll, or an individual planning your financial future, understanding how to calculate salary increase percentages is essential.

In this guide, we covered how to calculate salary increase percentages, find your new salary after an increase, and highlighted the importance of this skill. By mastering these calculations, you can make informed decisions, negotiate effectively, and plan your financial future with confidence.

So, next time, Recruitery hopes you'll easily adjust your salary without worrying about the related calculations because you will be equipped with the necessary knowledge to calculate salary percentages effectively and make informed financial decisions with our blog “How to Calculate the Salary Percentage”.