Calculating Your Annual Salary With Increases With Excel

by Bryan Keythman

You earn a salary if you receive a fixed amount of pay from your employer each pay period regardless of the number of hours you work. A salary differs from an hourly wage, which is the rate of pay an employee receives for each hour she works. If you know your weekly or biweekly salary, you can use Microsoft Excel to calculate your annual salary. Your employer may increase your annual salary by a certain percentage each year for various reasons, such as for good performance. You can use Excel to calculate your new annual salary after an increase.

Click cell A1 in a blank Excel worksheet.

Type either your gross weekly or biweekly salary, depending on your pay frequency, and press “Enter.” Gross salary is the amount you earn before taxes or other items are withheld. For example, if you earn a $2,500 gross biweekly salary, type “$2,500” and press “Enter.”

Click cell A2. Type “=A1*26” and press “Enter” if you receive biweekly pay. Alternatively, type “=A1*52” and press “Enter” if you receive weekly pay. Excel multiplies your salary in cell A1 by the number of pay periods in one year to calculate and show your annual salary in cell A2. Continuing with the example, because you receive biweekly pay, type “=A1*26” and press “Enter”. Excel returns “$65,000” as your annual salary in cell A2.

Click cell A3. Type the percentage salary increase you receive annually as a decimal and press “Enter.” In this example, assume you receive a 4 percent salary increase annually. Type “0.04” and press “Enter.”

Click cell A4. Type “=(A2*A3)+A2” and press “Enter.” Excel multiplies your annual salary in cell A2 by the percentage increase in cell A3 and adds the result to your annual salary to calculate your new annual salary after the increase. Excel displays the result in cell A4. In this example, Excel returns “$67,600” in cell A4, which is your annual salary after the increase.

Click cell A5. Type “=(A4*A3)+A4” and press “Enter.” Excel uses your annual salary in cell A4 -- which is your annual salary after the first increase -- to calculate your new annual salary after the second increase. Excel shows the result in cell A5. In this example, Excel returns “$70,304” in cell A5, which is your annual salary after the second increase.

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