📈Raise Calculator
Calculate how much your raise will actually increase your take-home pay after taxes. See the real impact on your paycheck and lifetime earnings.
Why Use This Calculator?
Net Raise After All Taxes
Calculate actual take-home increase after federal (10-37%), state (0-13%), FICA (7.65%), and pre-tax deductions. $10k raise = $6,500-7,500 net depending on bracket and state.
Marginal Tax Rate Impact
See how your current tax bracket affects net raise. 12% bracket keeps 80.35%, 22% keeps 70.35%, 32% keeps 60.35% after federal+FICA. Higher earners lose more to taxes on raises.
Tax Bracket Change Analysis
Identify if raise pushes you into higher bracket. $95k to $100k raise crosses 24% threshold - dollars above $96,350 taxed at 24% vs 22%. Only the excess taxed higher, not entire income.
Pre-Tax Deduction Optimization
Calculate ideal 401k/HSA contributions with new income. Higher salary = more room to max 401k ($23k limit). Contributing 10% of $10k raise to 401k saves $2,200-3,700 in taxes immediately.
Cost-of-Living Comparison
Compare raise to inflation (typically 2-3%). $3,000 raise (3%) just matches inflation - real income flat. Need 5%+ raises to gain purchasing power after inflation and taxes.
Lifestyle Inflation Planning
Budget how to allocate net raise - savings vs spending. Saving 50% of net raise ($3,250 of $6,500) builds wealth while enjoying improved lifestyle. Avoid spending entire raise on lifestyle upgrades.
Step-by-Step Guide
Enter Current Salary
Input your current annual gross salary before the raise. This establishes your baseline tax bracket and current take-home pay for comparison.
Example:
Example: $60,000 current salary, $75,000, or $100,000 depending on your situation
Input Raise Amount or Percentage
Enter raise as dollar amount ($5,000) or percentage (5%). Percentage automatically calculates dollar amount. Most raises are 2-5% annually, 10-20% for promotions, 20-40% for job changes.
Example:
Example: $5,000 raise, or 5% of $60,000 = $3,000, or 15% promotion = $9,000
Select Filing Status
Choose Single, Married Filing Jointly, or Head of Household. Filing status determines tax brackets and affects how much of raise you keep. Married brackets are wider = lower taxes.
Example:
Example: Single $65,400 taxable = 22% bracket, Married $65,400 = 12% bracket
Calculate New Tax Bracket
System determines if new salary crosses bracket thresholds. 2024 thresholds: 12% ends at $47,150 single, 22% ends at $100,525 single, 24% ends at $191,950 single, etc.
Example:
Example: $95k to $100k crosses from 22% to 24% bracket (only $3,650 taxed at 24%)
Apply Marginal Tax Rate
Raise dollars taxed at marginal rate (your top bracket), not average rate. $5k raise in 22% bracket = $1,100 federal tax, plus 7.65% FICA ($383), plus state taxes.
Example:
Example: $5,000 raise × 22% federal = $1,100 + $383 FICA + state = $1,483-1,900 total tax
Include State Income Tax
Add state tax (0-13.3% depending on state). California 9.3%, New York 6.5%, Texas/Florida 0%. State taxes further reduce net raise - critical for high-tax state workers.
Example:
Example: $5k raise in CA = $465 state tax, NY = $325, TX = $0
Factor in FICA Taxes
Always include FICA (7.65%): 6.2% Social Security + 1.45% Medicare. If new salary exceeds $168,600, Social Security stops but Medicare continues. High earners pay additional 0.9% Medicare over $200k/$250k.
Example:
Example: $5,000 raise = $310 Social Security + $73 Medicare = $383 FICA
Adjust for Pre-Tax Deductions
If increasing 401k/HSA contributions with raise, reduces taxable raise. Contributing $2,000 more to 401k reduces taxable raise from $5,000 to $3,000, saving $440-740 in taxes.
Example:
Example: $5k raise, increase 401k by $2k = only $3k taxable = $900-1,140 total tax vs $1,500-1,900
Calculate Monthly Net Increase
Divide annual net raise by 12 for monthly budget impact. $5,000 raise = $6.5k net ÷ 12 = $375-417/month increase. Plan savings/spending based on monthly net, not annual gross.
Example:
Example: $5k gross raise, $3,450 net after taxes = $288/month net increase
Compare to Inflation Rate
Check if raise exceeds inflation (typically 2-3%, higher in recent years). 3% raise = $1,800 on $60k salary, but inflation at 3% = $1,800 needed just to maintain purchasing power. Real gain is raise minus inflation.
Example:
Example: $60k + 5% raise = $3,000 gross, 3% inflation = $1,800, real gain $1,200 purchasing power
Expert Tips & Strategies
Negotiate Raises Based on Net Value
When negotiating, think net dollars not gross. A $10k raise sounds great but nets $6,500-7,500. If requesting $10k for specific expense, ask for $13k-15k gross to cover taxes. Employers think gross, you live on net.
Immediate 401k increase with Raise
Increase 401k contribution by 50% of gross raise before seeing larger paychecks. $10k raise → add $5k to 401k = $3,650 saved + $3,650 in paycheck. Prevents lifestyle inflation while boosting retirement. You won't miss money you never saw.
Watch for Bracket Creep Over Time
Multiple raises can push you through brackets. Going from 12% to 22% to 24% over years means keeping less of each raise. $3k raise at 12% nets $2,400, same raise at 24% nets $2,000. Plan tax strategies as income rises.
Factor Raises Into Job Change Decisions
External job offers typically beat internal raises (15-30% vs 3-5%). $70k to $85k new job (+21%) nets $10,500 extra annually vs 4% raise ($2,800 gross, $1,900 net). Job hopping every 3-4 years often maximizes lifetime earnings.
Ask About Gross-Up for Large One-Time Payments
For signing bonuses or relocation, negotiate gross-up (employer pays the taxes too). $10k bonus at 24% = $7,600 net, but $13,158 grossed-up = $10k net. Common for executive comp, rare for standard employees but worth asking.
Use Raise to Max HSA Triple Tax Advantage
If not maxing HSA ($4,150 individual, $8,300 family), use raise to reach limit. HSA is tax-deductible, grows tax-free, withdraws tax-free for medical - better than 401k. $4,150 contribution saves $1,222-1,536 in taxes at 22-37% brackets.
Lifestyle Inflation is Raise Killer
Most common mistake: spending entire net raise on higher rent, nicer car, expensive habits. $6,000 net raise = $500/month - spending all $500 means raise generates zero wealth. Save/invest 50% minimum, enjoy 50%. Future you will thank present you.
Document Raises for Future Negotiations
Track all raises and justifications. If getting 3% raises but peers get 5%, you lose $2k-4k annually compounding. Use data to negotiate: "My performance ratings are X, but my raises lag market by Y%". Compound effect of low raises costs $50k-100k over career.
Common Mistakes to Avoid
✓ Better approach: Committing to $10k/year expense ($833/month) based on $10k raise, but only netting $6,500 ($542/month). Creates $291/month shortfall. Always budget based on net raise after all taxes. Calculate actual monthly net before making spending commitments.
✓ Better approach: Large raise without W-4 adjustment causes underwithholding if crossing brackets. $60k to $100k salary without updating W-4 may withhold at 12% when actual bracket is 22-24%, leading to $2,000-4,000 tax bill. Update W-4 within 60 days of significant raise.
✓ Better approach: Calculating only federal tax (22% = $2,200 on $10k) but ignoring state tax (9.3% CA = $930 more). Total tax $3,113 + $765 FICA = $3,878, not $2,200. Net raise is $6,122, not $7,800. State taxes are unavoidable in 41 states - always factor them in.
✓ Better approach: Getting $6,000 net raise and immediately increasing rent $400/month + car payment $200 = $600/month ($7,200/year) - spending more than net raise. Creates regression not progression. Max 50% of net raise for lifestyle, save/invest other 50% minimum.
✓ Better approach: Accepting 2% raise ($1,200 gross, $800 net) without checking market rate. If market rate is 7% higher ($4,200), leaving $3,000 on table annually. Over 5 years with compounding, lost $18,000+. Check Glassdoor/PayScale/Bureau of Labor Statistics before accepting raises.
✓ Better approach: Focusing only on salary raise while benefits worsen. $5k raise but health insurance now costs $2k more = net $3k gain, not $5k. Or losing remote work (saving $3k commute costs) makes $5k raise a $2k net loss. Evaluate total compensation package.
✓ Better approach: Not increasing 401k contribution proportionally means missing new match dollars. Contributing 6% of $60k ($3,600) with 3% match ($1,800), then raise to $70k but keep $3,600 contribution - missing $300 match on extra $10k. Increase percentage, not dollar amount.
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Financial Disclaimer
This calculator is provided for educational and informational purposes only. The results are estimates based on the information you provide and should not be considered as financial, legal, or tax advice.
Actual results may vary based on your specific circumstances, market conditions, and other factors. Always consult with qualified financial, legal, and tax professionals before making any financial decisions.
We make no guarantees about the accuracy, completeness, or reliability of the calculations. Use this tool at your own risk.