Below, you can learn more about how pay raises work and how you can negotiate your pay raise or salary properly!
How Does The Pay Raise Calculator Work?
The pay raise calculator will help you determine your pay raise based on a percentage-increase or flat-rate increase in pay.
Within the calculator, you can select your Current Pay, Pay period (whether it’s hourly, annual, weekly, bi-weekly, or semi-monthly), and the Weekly Hours you’ve worked.
In the pay-raise section, you have the option to choose a Flat-Raise or a Percent-Increase Amount.
Flat Raise: With a flat raise, you will determine how much additional money you would be getting as a flat sum, which adds to your annual salary. You can also figure out weekly, bi-weekly, or semi-monthly pay by dividing the yearly amount by the appropriate period of time. But if math isn’t your strong suit, our pay raise calculator will automatically determine that for you.
For example, let’s say that your gross annual wages are $30,000, with weekly payments of $577 going your way. You currently 33 hours per week on average, and your employer proposes to give you a flat raise of $1,200. You want to determine how much their weekly pay will be and how much more you will ultimately receive. Add their current gross wages tothe Current Pay with the Pay Period set to Annual. Insert the Flat Raise amount of $1,200 and press “Calculate.” You’ll get a new weekly payment of $600 with a total difference of $23.
Percentage: With a percentage increase to your income, you calculate the raise by with the raise acting as a multiplier. As mentioned previously, our free pay raise calculator will automatically calculate the weekly, bi-weekly, and semi-monthly payments.
For example, let’s say you give an employee a 2% increase in their annual salary. The employee earns $75,000 annually, $1,442 weekly, and works 40 hours per week. Add their current salary to the Current Pay field with the Pay Periodset toAnnual. Insert the Pay Raise of 2% within the first box (leaving the second box blank) and select Percent for the input. Click “Calculate,” and you’ll see the new yearly salary of $76,550 with weekly payments of $1,471.
What’s An Example Of An Employee Pay Raise?
Let’s say you were going to leave your job as a medical engineer. Your current organization values your skill level and wants to keep you at the position. They offer a 15% pay raise to keep you as an employee. You currently work 45 hours per week and earn $15,000 monthly.
You can enter the percent-increase into our free online calculator to see what you receive after the pay raise. That’s an additional $1,500 per month. However, at another potential job, they offered you a $20,000 per month salary with fewer hours, which is more appealing. So, you’ll be making more while working less.
How Does An Employer Determine A Pay Rise?
Understanding how a pay raise works can be quite tricky at first. For an employer, a raise is an increased amount of compensation that an employee earns. A raise may be provided for numerous reasons or under entirely different circumstances as it’s very situational. However, generally, this is quite a positive gesture as increased earnings can help you improve your overall spending power and take-home salary, and by giving you a raise – your employer is trying to show that they value your efforts.
Performance Appraisal: Whether it’s a performance appraisal or salary adjustment meeting, your employer will be monitoring your overall performance in the company based on a wealth of various criteria. However, the type of scoring system they use can be entirely subjective and manager-dependant. Many individual businesses try to balance personal opinions through item-based performance, where the employee completes several set-in-stone groups of tasks within the organization.
Usually, performance appraisal happens once or twice a year. It takes place during the start of a new year and is followed by a formal meeting by the mid-point or end of the year. Based on the appraisal, a performance score is defined for each given employee. According to this score, an employee may receive a pay raise, be compensated in some other viable form, or in the event that their score wasn’t good – they may be let go altogether.
Contractual Agreement: A regular pay raise can be determined based on a contractual agreement between the employee and the organization. This sort of arrangement is quite common in union positions, and the pay raise is, in this case, determined by a compensation system. Union workers have the benefits of receiving premiums and overtime wages, among other benefits that non-union workers don’t get.
For example, if your union is negotiating a 2.5% increase in annual salary and you’re taking home $2,500 per month at 30 hours per week, you can expect a $62 raise in your monthly payments (which comes to a total of $2,562).
Cost Of Living & Compensation: The cost of living adjustment (COLAs) is based on how much a person has to spend to maintain their well-being. It’s a great indicator of how commonly used goods and services are changing in pricing, including healthcare, clothes, and education. CPI is a decision-making tool used by the government and private companies, so they can measure how much a dollar of income can purchase at any given moment and compensate employees accordingly.
For example, David works at Lowes for 30 hours weekly and makes $18 an hour. The CPI basket of goods increases by 2.5%, and Lowes choose to raise their employee’s hourly wage by $2.50. You want to use the flat-rate to determine the new hourly and annual rate. David can expect an hourly wage of $20.50 per hour and a yearly salary of $31,980 (previously $28,080).
What Is The Difference Between A Salary And Hourly Pay Raise?
There are several options when it comes to how an employer can compensate their employees. Two of the most popular options are salaried and hourly compensation. Hourly employees are paid for the exact amount of time they’ve worked in the organization, while salaried employees are paid a set amount, regardless of the time they put in.
Hourly Pay Raise Example: Let’s say you work as a security guard for a technology company. You’re compensated $20 per hour and work an average of 30-hours per week. You’ve been an employee of the month for 4-times out of 6-months, and your employer decides to give you an hourly raise of $4.50 based on your performance. You now want to know your new weekly pay and annual wage. If you plug in the numbers into the pay raise calculator above, you’ll see that you can expect a weekly compensation of $735 and a yearly salary of $38,220.
Salaried Pay Raise Example: You work as a marketing manager at a growing agency. Your current salary is $65,000 annually, and you work around 37 hours per week (9 am to 6 pm). However, you’re expected to work additional hours to ensure client targets are met. With these extra hours, you decide to ask for a promotion to the Senior Marketing Manager position. You get the position and a pay raise proposal of 10%. Now, you want to calculate your new annual, hourly, and bi-weekly pay – just plug the numbers into the pay raise calculator. Once you do, you’ll see that you can expect a new yearly salary of $70,400, an hourly rate of $37, and a bi-weekly compensation of $2,707.
You can also calculate your salary here