Salary Raise Calculator
Raise input method
SHRM 2026 average merit raise ~3.5%; promotion bumps typically 8–15%.
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How to use
- 1 Enter your current annual gross salary.
- 2 Choose how to specify the raise: Percent (e.g., 5%), Amount (e.g., $5,000), or New Salary (total after raise).
- 3 Enter filing status, pre-tax 401(k) contribution rate (5-15% typical), and state income tax rate (CA up to 13.3%, NY 10.9%, FL/TX/WA = 0%).
- 4 The calculator computes federal tax, FICA, and state tax on BOTH salaries (current and new), then subtracts to find the actual take-home increase.
- 5 Click Calculate to see net raise (annual + biweekly), real retention rate (% of gross raise kept), and whether you crossed into a higher marginal bracket.
About Salary Raise Calculator
FAQ
Q How much of my raise do I actually keep?
Typically 60-75% of gross. The rest goes to federal income tax (12-37% marginal), Social Security 6.2% (up to $184,500), Medicare 1.45%, Additional Medicare 0.9% if over $200K, and state tax (0-13%). Pre-tax 401(k) voluntary contribution further reduces take-home.
Q Why is my raise less than I expected after taxes?
Marginal taxation. Your raise is taxed at your TOP bracket rate, not your average rate. A $5,000 raise at 24% federal + 7.65% FICA + 5% state = $1,832 federal tax + $383 FICA + $250 state = $2,465 total tax. You keep $2,535 — about 51%.
Q What is a marginal tax bracket jump?
When a raise pushes part of your income into a higher tax bracket. Example: from $200K → $210K crosses the $201,775 single threshold from 24% to 32% bracket. The first $1,775 stays at 24%, but $8,225 of the raise is taxed at 32%.
Q Is a 5% raise good in 2026?
It's above CPI-W 2.8% inflation (Social Security 2026 COLA), so it's a real raise. Industry benchmarks: 3-4% COLA, 4-7% promotion, 8-15% market adjustment. Below 3% is effectively a pay cut after inflation. Use this calculator to see the after-tax reality.
Q Should I increase 401(k) when I get a raise?
YES — most experts recommend "save the raise" by bumping 401(k) % by half the raise %. Example: 5% raise → increase 401(k) from 8% to 10.5%. You won't feel the cut (paycheck stays similar), but retirement savings grow tax-deferred. Free money matched by employer often.
Q How much raise do I need to break even with inflation?
2026 CPI-W is 2.8% (per SSA Oct 2025 announcement). To maintain real purchasing power, you need at least 2.8% raise. Below that = real pay cut. Most companies target 3-4% annual to roughly match. To make REAL progress, target 5%+ in non-promotion years.
Q Does Social Security stop above $184,500?
YES — once your YTD wages reach $184,500 in 2026, no more Social Security tax (6.2% × $184,500 = $11,439 maximum). Medicare 1.45% continues with NO CAP. Additional Medicare 0.9% kicks in above $200K. Net effect: high earners who cross $184,500 mid-year see paycheck "raise" of 6.2% for remaining months.
Q How is bonus tax different from salary tax?
IRS treats bonus as "supplemental wage" — Pub 15-T flat 22% federal withholding (37% above $1M), plus FICA + state. Your actual marginal might be 32%, so you'll owe more at filing. Salary uses the percentage method with brackets, more accurate per-paycheck.
Official resources
IRS Publication 15-T (2026) — Federal Income Tax Withholding
Official IRS publication used by all payroll systems to compute federal withholding on salary and supplemental wages.
IRS — Federal Income Tax Rates and Brackets
Internal Revenue Service official 2026 tax bracket schedule for all filing statuses.
BLS — Employment Cost Index (Wage Growth)
Bureau of Labor Statistics quarterly Employment Cost Index — benchmark for evaluating fair raise levels.
SSA — 2026 COLA and Wage Base
Social Security Administration 2026 fact sheet announcing 2.8% COLA and $184,500 SS wage base.