How to Calculate an Annual Salary Raise Rate

If your employer mentions an annual raise without providing specific details, you may perform a basic calculation to determine the rate of your pay raise. Using your current base salary as a starting point, you can compute the amount of your increased pay if you know the amount of your new salary or the increased percentage over your former salary. You can also take advantage of a pay raise calculator. Here's what you should do to find the annual salary raise rate.

Note your current annual salary. Use your weekly, biweekly or monthly salary to calculate your annual salary if you're unsure of your earnings.

Multiply your current weekly salary times 52 weeks to compute your annual salary. If you're paid biweekly, multiply your current salary times 26 weeks to obtain your annual salary. If you're paid semi-monthly, multiply your current salary times 24 pay periods to determine your annual salary. Multiply your current salary times 12 months if you're paid monthly to determine your annual salary.

Calculate the percentage of your salary increase. Subtract the amount of your former salary from your new salary to obtain the amount of your salary increase; divide the result by your former salary. Multiply that amount times 100 to obtain the percentage of your salary increase.

For instance, if your new salary equals $36,000 and your former salary equaled $30,000, your salary increase equals 20 percent: $36,000 minus $30,000 equals a $6,000 annual increase; $6,000 divided by $30,000 equals 0.20, which multiplied times 100 equals a 20 percent annual salary increase.

Calculate your salary if your raise was expressed as a percentage. For instance, if your employer has offered to increase your current salary 20 percent next year and an additional 20 percent the following year, you perform the following calculation to determine your annual salary.

If your salary equals $30,000, you multiply it times 20 percent to obtain your increased salary of $36,000 – $30,000 times 0.20 equals $6,000, which added to your original salary now equals $36,000. The following year, you perform the same calculation to realize an increased salary equal to $43,200: $36,000 times 0.20 equals $7,200. When added to your last salary, it now equals $43,200.

Next, add your annual pay raise to your current salary. If your current salary equals $30,000 and your employer provides a $7,500 pay raise, your annual salary increases to $37,500, or $30,000 plus $7,500.

Multiply the amount of your weekly salary increase by the number of weeks to determine your annual salary. For instance, if your salary is currently $30,000 and your employer increases your salary $100 per week, your new annual salary equals $35,200: $100 times 52 weeks per year equals $5,200, plus your former salary of $30,000 equals $35,200.