Salary calculator

Salary Hike Calculator - Salary Hike Percentage Calculator For Payroll In India

Use our salary hike calculator to calculate the new salary after the hike. Also, calculate the hike percentage with your new salary.

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Your new salary after the hike is : ₹14,234

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Your hike percentage is : 20%

Salary hike: What is a hike in salary?

A salary hike, also known as an increment is an increase in the current wage by a fixed percentage. This is expressed as a percentage of the current salary and is known as the percentage hike.

Read: Monetary benefits for employees

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How to calculate new salary using hike percentage?

Here is how you can calculate the new salary after a hike using the hike percentage.

Step 1: Convert the hike percentage into decimals.
Step 2: Multiply it by your current salary. Now, this is your increment/hike amount.
Step 3: Add the hike amount to your current salary. The result is your new net salary after the hike.

Salary hike formula

Net new salary formula

Let us understand the math by calculating 30% hike in salary.

Step 1: Now 30% hike is 30/100 which is 0.3.
Step 2: Let us imagine the current salary being ₹20,000. So, 20,000*0.3 is ₹6000.
Step 3: Adding the increment of ₹6000 to the current salary makes it ₹26,000. Now this is the new net salary after the hike.

How to calculate the salary hike percentage?

Here is how you can calculate the salary hike percentage.

Step 1: Calculate the difference between your new salary after the hike and your old salary.
Step 2: Divide the result by your old salary.
Step 3: Multiply the obtained number by 100. Now, this is your hike percentage with respect to your old salary.

Salary hike percentage calculation formula

Hike percentage formula

Let us understand this with an example.

Let us imagine the new salary to be ₹25,000 and the old salary to be  ₹20,000.
Step 1: The difference between the new and old salary is ₹5000
Step 2: Now, 5000/20000 is 0.25.
Step 3: Multiplying 0.25 with 100 gives you 25. Hence, the salary hike is 25%.

Also read: What is variable comp and fixed comp?

Calculating a 40% Salary Increase

To determine a 40% increase in your salary, follow these straightforward steps:
Know Your Current Salary: Start with the exact amount of your present earnings.
Calculate the Increase: Multiply your current salary by 0.40. This step will give you the amount of the increase.
Calculate the New Salary: Add the increase to your current salary to find the new total.

Example:
Current Salary: $50,000
40% Increase Calculation: $50,000 x 0.40 = $20,000
New Salary: $50,000 + $20,000 = $70,000By following these steps, you can easily determine what your new salary will be with a 40% hike.

Why use a salary hike calculator?

A salary hike calculator is a handy tool that makes the process of calculating increments quick, accurate, and transparent. Instead of relying on manual calculations or guesswork, it gives you instant and error-free results. Here’s why it’s useful:

  1. 1.  Saves time with instant results
    You don’t have to sit with formulas or spreadsheets, just enter your details, and the calculator instantly shows your new salary and percentage hike.
  2. 2.  Eliminates manual errors in calculation
    Small mistakes in manual calculations can create confusion during appraisals or job offers. The calculator ensures accuracy every time.
  3. 3.  Works for all salary scenarios
    Whether you’re checking a CTC hike, a percentage hike, or a simple take-home salary increment, this tool helps in all scenarios.

Why is salary hike calculation important?

Understanding how salary hikes are calculated is essential for both employees and employers. It goes beyond just knowing the numbers using a CTC hike calculator, or percentage hike calculator plays a key role in career growth, payroll management, and financial planning.

Helps employees negotiate better during appraisals

When employees know how hikes are calculated, they can set realistic expectations and confidently negotiate during performance reviews or job changes. A percentage hike calculator makes it easier to understand the actual increase in take-home salary.

Assists HR in payroll planning

HR teams and employers can use CTC hike calculators to budget annual appraisals, manage payroll expenses, and ensure fair and transparent compensation policies.

Useful for budgeting personal finances and investments

A clear understanding of salary hikes helps employees plan for future expenses, savings, tax planning, and investments more effectively. With a salary hike calculator, individuals can forecast their revised earnings and make smarter financial decisions.

Builds salary transparency & trust

When organizations clearly communicate how salary hikes are calculated, it builds employee trust and promotes transparency in compensation policies.

Helps compare job offers effectively

With a CTC hike calculator employees can compare offers from different employers and understand the real impact of the hike on take-home pay.

Different types of salary hike in India

Salary hikes in India vary depending on the reason for the increment and company policies. Here are the most common types:

  1. 1.  Performance-based hike
    • Awarded based on an employee’s contribution, achievements, and overall performance.
    • Encourages productivity, skill development, and goal-oriented work.
  2. 2.  Promotional hike
    • When an employee is promoted to a higher role or managerial position.
    • Usually higher than a regular appraisal hike since it comes with added responsibilities.
  3. 3.  Market adjustment hike
    • Offered to align employee salaries with industry standards or competitor benchmarks.
    • Helps employers retain talent in competitive industries.
  4. 4.  Annual appraisal hike
    • A yearly increment given to all eligible employees.
    • May vary depending on company performance, budget, and economic conditions.
  5. 5.  Retention/Counteroffer hike
    • Offered when an employee is considering another job offfer
    • Acts as a retention tool to prevent talent loss.

Employee benefits solutions from Pazcare

Give your employees top-class employee benefits solutions to help the employees increase their take home salary. Employee insurance benefits like group health insurance equip the employees against any medical emergencies. Group term life insurance protects your employees’ families financially.

Get curated employee benefits with Pazcare for the best prices.

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FAQs on salary hike calculator

Why are salary hikes given?

Employers award salary hikes based on several factors, including:

Performance: Recognition of the employee's accomplishments and contributions.

Experience: Reward for the skills and expertise that come with professional tenure.

Inflation: Adjustment to keep up with the cost of living increases.

Market Conditions: Alignment with industry standards and economic conditions to retain talent.

How can a salary hike calculator help me?

A salary hike calculator helps you understand how much your pay will increase with a given raise percentage. You can calculate your new salary by inputting your current salary and the proposed hike percentage. This tool is invaluable for planning your finances and setting realistic expectations in salary negotiations.

What should I consider when negotiating a salary hike?

When negotiating a salary hike, consider the following:

Your Performance: Be prepared to discuss your achievements and how they've benefited the company.

Market Value: Research what others in similar roles and with similar experience are earning.

Company's Financial Health: Consider the current financial status of the company and industry trends.

Expected Inflation Rates: Discuss how inflation affects living costs and the need for compensation adjustments.

How does inflation affect salary hikes?

Inflation can significantly impact salary hikes as it affects the overall cost of living. Employers may offer salary increases to ensure that employee wages are sufficient to meet higher living costs, maintaining employee satisfaction and financial stability.

What is the importance of understanding percentage hikes in salary negotiations?

Understanding how percentage hikes work helps you evaluate the real value of the proposed increase. It enables you to compare your new potential earnings against market rates and inflation, ensuring that the hike meets your financial and professional growth needs.

Can using a salary hike percentage calculator improve my financial planning?

Absolutely. By calculating your new salary after a proposed hike, you can better plan your budget, savings, and investments based on your new income. This planning is crucial for long-term financial health and achieving personal financial goals.

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