Negotiation Maths
Pay Rise Calculator
A $5,000 raise is not $5,000 in your pocket. See exactly how much of your next pay rise survives tax — and what it means per month.
Your details
Typical annual rises are 3–5%; promotions often 10–20%.
What you actually keep
Extra take-home per year
That's $275 more in your pocket each month.
You keep
of the raise, after tax.
Before and after
| Current | After rise | Change |
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Estimates assume a single resident taxpayer on standard settings. For pension, student loans, state taxes and more, use the full salary calculator.
The Fine Print
Why a raise never feels as big as it sounds
Every extra dollar you earn is taxed at your marginal rate — the highest rate that applies to you. That's why the last slice of your income is always the most heavily taxed slice.
The bracket myth
A pay rise can never leave you with less take-home pay. Tax brackets are marginal: crossing a threshold only changes the rate on the income above that threshold. If your raise straddles two brackets, part is taxed at the old rate and part at the new one.
Negotiate with net numbers
Knowing your keep-rate turns a vague "5% raise" into a concrete monthly figure. If you keep roughly two-thirds of each extra dollar, a $6,000 raise is about $330 a month in hand — a much more useful number when weighing a counter-offer or a job move.
Check it against inflation
A raise that trails inflation is a pay cut wearing a party hat. If prices rose 4% this year, a 3% raise leaves you able to buy about 1% less than before — before tax has even taken its slice of the new money. Always compare the percentage you're offered with the current inflation rate, and use the inflation calculator to see what your salary is really worth in today's money.
Raises compound like interest
Every future percentage increase builds on today's base, so one good negotiation pays you for decades. On a $60,000 salary, averaging 5% annual raises instead of 3% puts you around $159,000 rather than $108,000 after twenty years — roughly $51,000 more every year by the end, from the same starting point. Percentage bonuses, employer pension contributions and overtime rates all scale with that base too.
A worked example: turning "5%" into a monthly number
Say you earn $90,000 and your manager offers 5% — a $4,500 headline raise. Every dollar of it sits on top of your existing income, so it's all taxed at your marginal rate. Suppose that rate, including social contributions, is 35%: tax takes $1,575, leaving $2,925 a year, or about $244 a month in your account. Still real money — but a third smaller than the number in the congratulations email.
Run the same numbers before the conversation and you can negotiate in take-home terms: "I'm looking for an extra $400 a month" translates back to roughly a $7,400 gross raise at that keep-rate. Asking for a gross figure that produces the net outcome you want is far more precise than picking a round percentage — and it signals you've done the maths. The calculator above applies your country's actual 2026 brackets, levies and phase-outs rather than a flat assumption, so the keep-rate it shows you is the one that matters.
One more trick: if the raise lands you just above a threshold where a benefit phases out or a surcharge kicks in, model the difference. Occasionally it's worth asking for slightly more — or redirecting the excess into a pension — to avoid a cliff edge. The full salary calculator handles pensions, student loans and regional taxes for exactly this purpose.
Frequently asked questions
Why don't I keep the full amount of my pay rise?
A pay rise is taxed at your marginal tax rate — the rate that applies to the top slice of your income — not your average rate. Because a raise sits on top of everything you already earn, income tax, social levies and any income-tested repayments all take a slice of the new money.
Will a pay rise push me into a higher tax bracket and leave me worse off?
No. Tax brackets are marginal, which means the higher rate only applies to the income above the bracket threshold, never to your whole salary. A raise always increases your take-home pay; it just increases it by less than the headline amount.
Is this calculation exact?
It is a close estimate based on the standard rates for your country, assuming a single resident taxpayer with no unusual deductions. For a fully personalised breakdown including pension, student loans and state or provincial taxes, use our full salary calculator.
What is a "real" pay rise?
A real pay rise is one that beats inflation. If your salary goes up 3% while prices rise 4%, your purchasing power fell about 1% even though the number on your payslip grew. When judging an offer, subtract the current inflation rate from the raise percentage first — then apply your keep-rate to see what actually changes in your bank account.
Should I take extra salary or extra pension contributions?
Extra salary is taxed at your marginal rate immediately; pension or super contributions usually go in with little or no tax now, but lock the money away until retirement. If your marginal rate is high and you don't need the cash flow, contributions often win mathematically — especially where an employer matches them. It depends on your country's caps and rules, so treat this as a starting point for research, not personal advice.