Calculating a change in your salary is a simple process that requires only a few simple mathematical operations. Ideally, you're getting an increase and you want to figure out how much extra cash you'll have. If you're getting a pay cut, then you'll need the information to figure out how much and where to cut back. Either way, it's valuable information that you can use to help better plan your budget.
Calculating Dollar Increase or Decrease
1. Multiply the percentage increase or decrease by your current, pretax salary. Salary changes are often reported to employees in terms of percentages; for example, "John, you've earned a 5 percent increase because of your good work." If you're using a calculator, enter your annual salary and multiply it by the percentage change you're getting. Percentages can be written in decimal form. Five percent is expressed as .05, while 12 percent is expressed as .12, for example. The result is the dollar amount that your salary is increasing or decreasing.
2. Calculate the new annual salary. If you're getting an increase, add the result from Step 1 to your current salary; this is the new annual salary. If you're getting a decrease, subtract the Step 1 result from your current salary.
3. Calculate your weekly, semi-monthly or monthly pretax salary. Divide the total from Step 2 by 52, 26 or 12, respectively, representing the number of checks you receive per year. This is your pretax -- or gross -- salary. From this number, you must subtract taxes and other deductions, such as retirement contributions. For help determining these figures, contact your human resources representative. Each person will have different calculations, depending on their tax withholding, salary and other personal items.
Calculate Percentage Increase or Decrease
1. Subtract the old salary from the new salary. If you're getting an increase, this dollar amount will be a positive number; if you're getting a decrease, it will be negative.
2. Divide the result from Step 1 by the old salary. This will be a decimal number. If you're getting an increase, the decimal number will be positive; if a decrease, it will be negative.
3. Round the decimal number if the result from Step 2 has 3 or more decimal places. To round the decimal, look at the number three places to the right of the decimal point. If the number is 5 or above, increase the number directly to its left by 1. For example, the decimal 0.125 is rounded to 0.13.
4. Multiply the result from Step 3 by 100. This is the percentage increase or decrease.
- If you earn an hourly rate, follow the same steps as above, substituting hourly rate for annual salary. When you have the new hourly rate, multiply that total by the number of hours you work in a week to determine weekly salary.
Items you will need
- Current annual salary
- Amount of increase or decrease
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