Tip Use Raise vs Inflation for a single review cycle. Adjust with CPI to compare salaries across dates. Required Raise to preserve/target purchasing power. Chain to see multi-year impact.
Exact Fisher: (1 + greal) = (1 + gnom) / (1 + π)
Amountend = Amountstart × (Indexend / Indexstart)
Target real change rtarget: Required nominal g = (1 + rtarget)(1 + π) − 1
Cumulative real change = ∏t (1+gt)/(1+πt) − 1 · CAGR = (1+cum)1/N−1
Keep frequency & index bases consistent. Exact Fisher math avoids approximation errors at higher rates.
Built-in U.S. data source: CPI-U, all items, U.S. city average, not seasonally adjusted, from the U.S. Bureau of Labor Statistics CPI program public series CUUR0000SA0.
Data through: December 2024 in the built-in selector. Last reviewed: June 30, 2026. For newer months or another country/index, switch to manual CPI values.
Assumption: calculations use gross salary before taxes, deductions, benefits, and retirement contributions.
Real wage growth uses the exact Fisher relationship:
(1 + greal) = (1 + gnominal) / (1 + inflation)
A salary keeps the same purchasing power when the nominal raise equals the price-index increase for the same period. For CPI comparisons, the index base does not matter as long as the start and end values come from the same series.
Inputs: $60,000 salary, 3% raise, 4.2% inflation.
Formula: (1.03 / 1.042) - 1.
Result: -1.15% real wage growth, about a $690 purchasing-power loss.
The raise improves nominal pay but does not fully keep up with prices.
Inputs: $60,000 salary and 4.2% inflation.
Formula: break-even raise = inflation.
Result: $62,520 is needed to preserve purchasing power.
A lower offer is a real pay cut before taxes and deductions.
Inputs: start salary, start CPI, and end CPI.
Formula: salary x end CPI / start CPI.
Result: use the CPI mode with built-in data through 2024, or enter newer 2026 CPI manually.
This converts the old salary into end-date dollars with the same buying power.
Inputs: raises of 3%, 2.5%, 5%, 4% and inflation of 2%, 6%, 3.2%, 1.8%.
Formula: multiply each year's (1 + raise) / (1 + inflation).
Result: about +1.50% cumulative real growth.
Compounding can offset one weak year if later raises beat inflation.
Start with the break-even raise: it is the minimum nominal increase needed to keep gross purchasing power flat. The shortfall or surplus in the results shows how far the offer sits below or above that threshold.
This calculator does not model income tax, payroll tax, deductions, benefits, or retirement contributions. A raise can beat inflation on gross salary but still feel different after taxes or benefit changes.
CPI is an average basket. Your personal inflation may be higher or lower if rent, childcare, commuting, medical costs, or debt payments dominate your budget.
Built-in CPI data are a convenience for U.S. CPI-U comparisons through December 2024. For current BLS releases, UK CPIH, RPI, PCE, local CPI, or a company-specific cost-of-living index, use manual CPI/index values from the official source.
Your raise must be higher than inflation for the same period. For a target real gain, use required raise = (1 + target real change) x (1 + inflation) - 1.
It is enough to keep gross purchasing power roughly flat. It is not a real pay increase, and after-tax effects can differ.
Multiply the old salary by the end price index divided by the start price index. Use one consistent index series for both dates.
Use the index that matches your geography and purpose. CPI-U is common for U.S. consumer prices, CPIH is a broad UK measure including owner occupiers' housing costs, RPI is a legacy UK measure, and PCE is often used for U.S. macro analysis.
No. Results are based on gross salary before taxes, deductions, benefits, and retirement contributions.
A bonus can help one year's income, but a one-time payment does not protect the recurring salary base unless it repeats or becomes part of base pay.
Real wage growth is (1 + nominal wage growth) divided by (1 + inflation), minus 1. This exact formula handles higher rates better than simply subtracting inflation from the raise.
