Raise vs Inflation Calculator

Compare your percentage raise to inflation over the same period, but do it properly: a raise only increases your buying power if it exceeds inflation. If prices rose 6% and your raise was 4%, your real pay fell by roughly 1.9% even though your salary number went up. This calculator converts your new salary into last year's money so you can see the real change instead of the flattering headline figure.

Because the two compound rather than subtract. A 10% raise against 5% inflation isn't a 5% real gain — it's (1.10 ÷ 1.05) − 1 = about 4.76%. The naive subtraction overstates your gain (or understates your loss). The gap is small in any one year but compounds meaningfully over a career, which is why using the exact (Fisher) relation matters.

A real-terms pay cut is when your salary rises in nominal terms but buys less than it used to because prices rose faster. It's extremely common: in high-inflation years, a typical 2–4% raise is a real pay cut of a percent or two. Your payslip looks better while your standard of living quietly declines — which is exactly what this tool is designed to make visible.

Use headline consumer price inflation (CPI) for your country over the period since your last raise — usually the past 12 months. For a more personal answer, use your own experienced inflation if your spending is skewed toward faster-rising categories like rent, energy, or food. The calculator defaults to a representative recent figure for your region, which you can adjust.