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Salary Hike Formula:
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Salary hike calculation determines the percentage increase in salary from an old amount to a new amount. It helps employees understand their compensation growth and employers plan salary budgets effectively.
The calculator uses the salary hike formula:
Where:
Explanation: The formula calculates the relative increase as a percentage of the original salary, providing a standardized way to compare salary growth across different income levels.
Details: Accurate salary hike calculation is crucial for financial planning, career progression analysis, negotiation preparation, and understanding real income growth after accounting for inflation.
Tips: Enter both old and new salary amounts in the same currency. Ensure values are positive numbers. The calculator will automatically compute the percentage increase and absolute amount difference.
Q1: What is considered a good salary hike percentage?
A: Typically, 3-5% is considered standard for annual increments, while 10-15% or more may indicate promotions or job changes. Industry standards vary significantly.
Q2: How does this differ from cost of living adjustment?
A: Salary hike includes merit increases and promotions, while COLA specifically addresses inflation. A hike below inflation rate represents a real-terms pay cut.
Q3: Should bonuses be included in salary calculations?
A: For comprehensive analysis, include regular bonuses and benefits. However, for basic hike calculation, focus on fixed base salary for consistency.
Q4: How often should salary hikes be calculated?
A: Typically calculated annually during performance reviews, but can be calculated whenever there's a salary change for career progression tracking.
Q5: What if the new salary is lower than the old salary?
A: The calculator will show a negative percentage, indicating a salary decrease. This helps identify pay cuts or unfavorable job changes.