How to Calculate Salary Increase Percentage
Salary increment comes in many different forms. Perhaps you have accepted a new and higher paying job or have a job promotion or raise. Despite the circumstances, you must understand how to get your salary increase in terms of percentage to the old rates.
Furthermore, since the cost of living statistics and inflation rates are expressed in terms of percentage, finding the salary increase in percentage assists you in getting a comparison in the rise of other factors such as inflation.
The guide illustrates a step by step guide on how to come up with a salary increase percentage.
- Differentiate The First Salary from The Second Salary
For instance, you made $50,000 after six months at the old job and luckily got a higher paying job worth $60,000 after the six months. This means you will subtract $60,000 – $50,000 to get $10,000.
In case you get hourly pay, and you aren’t sure of the total earnings after every six months, you can use the new and old hourly rate instead of the salary. Say the raise was from $18 per hour to $20 per hour, then subtract $20 – $18 to get $2.
- Now Divide the Difference in Salary with The Old Salary
To convert the increasing amount to a percentage, begin first by converting the difference to a decimal. To find the decimal, use the salary difference you received in the first step, then divide it with the old salary.
Using the example from the first step, it means taking $10,000 then divide it by $50,000, $10,000/$50,000 to get 0.2.
When looking for the salary increase in percentage per hour, do the same. Just take $2/18 you get 0.111.
- Multiply The Difference
Once you convert the figures into decimals, it’s now time to convert them into a fraction. Just multiply the number by 100. Taking the above example, you will multiply 0.2 by 100 and get 20%. Therefore, your new salary increase of $60,000 after every six months is 120% of the previous $50,000. Or the salary increase is 20%
To get the hourly rate example, make sure you multiply the decimal number by 100. For instance, take 0.111 by 100 to get 11.1%.
Voila! You now have your salary percentage increase. However, there are many online calculators that you can use to get a salary increase in percentage form. But the examples illustrated above works properly when you express in different currencies.