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How To Calculate Your Salary Hike Percentage

How To Calculate Your Salary Hike Percentage

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Fi Money is not a bank; it offers banking services through licensed partners and investment services through epiFi Wealth Pvt. Ltd. and its partners. This post is for information only and is not professional financial advice.

This blog will help you whether you're changing jobs, getting a performance appraisal, or asking a client for a raise. Percentages are useful for comparisons, such as comparing your current salary to your next or to someone with similar experience. However, absolute numbers are what truly matter. A 60% increase on a fee of ₹1,500 is not much in real terms, but percentages can help put pay changes into context. Here’s how you can calculate your salary hike in percentage terms.

Calculating the percentage hike in your salary.

Step 1: Have your new salary and old salary details available

To begin, have your old and new salary details available. For instance, if your old salary was ₹50,000 and the new one is ₹60,000, you'll need these figures to compare.

Step 2: Subtract the difference

Next, find the salary difference. For instance, in our example, the difference is ₹10,000 (₹60,000 — ₹50,000).

Step 3: Calculate the hike as a percentage of your old salary

To calculate your increase, divide the salary difference by your old salary and multiply by 100. In this case, that's a 20% hike [(₹10,000 ÷ ₹50,000) x 100].

You can also do this calculation quite easily on MS Excel or GSheets. This is what it might look like on the spreadsheet.

How to Compute Your New Salary If You Know the Hike Percentage?

To calculate your new salary after a hike, you can use the salary hike formula. For example, if you currently earn ₹1,00,000 per month and will receive a 15% hike, you can find your new salary by filling in the values in the formula:

Salary hike percentage = [(New salary — Old salary) x 100] ÷ Old salary

By solving for the new salary, we get:

New salary = ₹15,000 + ₹1,00,000

Therefore, your new salary will be ₹1,15,000.

3 Reasons You Need to Know How to Compute Your Salary Hike

Knowing how to calculate salary hike percentage is useful for 3 benefits.

1. You can ask for a salary that is on par with industry standards.

To ask for a raise, first find out the average salary increase in your industry. Use the formula above to calculate a reasonable salary increase based on your current income before making your request.

2. You can negotiate your salary hike better

This doesn’t need explaining, but knowing how to compute your salary pay hike can also help you get paid better.

‍3. You can plan your taxes better

The formula we talked about earlier can also help you calculate your new salary if you know your raise percentage. You can then check if your income has increased to the next tax bracket and adjust your tax savings accordingly, if necessary.


In conclusion, understanding how to calculate your salary hike percentage and your new salary after a hike is an essential skill for anyone who is looking to change jobs, get a performance appraisal, or ask for a raise. By knowing the percentage increase in your salary, you can negotiate your pay better, plan your taxes better, and ask for a salary that is on par with industry standards.

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Frequently Asked Questions

‍1. How to calculate a 30% hike in salary?

To get a 30% raise, calculate 30% of your current salary and add it to your pay. For example, if you earn ₹50,000 a month, a 30% raise would be ₹15,000 more, bringing your new salary to ₹65,000.

2. How do you calculate a 20% increase in salary?

To calculate a 20% salary increase, use this formula: [(New salary — Old salary) x 100] ÷ Old salary. For example, with a current salary of ₹60,000, a 20% increase would result in a new salary of ₹72,000.

3. How is salary hike percentage calculated?

To calculate a salary increase percentage, divide the difference between the new and current salary by the current salary, and then multiply the result by 100. The formula is: (New Salary - Current Salary) / Current Salary * 100.

4. Is salary hike calculated on CTC or basic?

Salary hikes are typically calculated on the basis of the employee's basic salary.

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