1. What is the Pay Rate Equation?

The Pay Rate equation calculates the percentage increase in pay by comparing the pay increase to the original pay amount. It helps employees understand the relative value of their raise.

2. How Does the Calculator Work?

The calculator uses the Pay Rate equation:

Where:

• \( Pay\ Increase \) — The amount of raise in dollars
• \( Original\ Pay \) — The original salary or wage amount in dollars

Explanation: The equation converts the dollar increase into a percentage of the original pay, showing the relative size of the raise.

3. Importance of Pay Rate Calculation

Details: Understanding your pay increase as a percentage helps compare raises across different salary levels and evaluate the raise relative to inflation or cost of living increases.

4. Using the Calculator

Tips: Enter both the pay increase amount and original pay amount in dollars. Both values must be positive numbers, with original pay greater than zero.

5. Frequently Asked Questions (FAQ)

Q1: What's considered a good pay increase rate?
A: Typically, 3-5% is standard for cost of living adjustments, while 10%+ may indicate a promotion or exceptional performance.

Q2: How does this differ from annual salary increase?
A: This calculates any pay increase, whether annual, promotion-based, or one-time. Annual increases are typically calculated from your previous year's salary.

Q3: Should bonuses be included in pay increase calculations?
A: Only if comparing total compensation. For base salary comparisons, use only the base salary amounts.

Q4: How does inflation affect pay increase rates?
A: A raise below inflation rate means reduced purchasing power despite higher nominal pay.

Q5: Can this calculator be used for hourly wage increases?
A: Yes, input either the per-hour increase and original wage, or the annualized amounts.