How to Calculate Salary Hike Percentage (and Your New Salary)
Work out your salary hike percentage from old and new pay, find your new salary after an 8% or 15% hike, and see why two 10% hikes are 21%, not 20%.
The short answer
Salary hike percentage = (new salary − old salary) ÷ old salary × 100. If your monthly salary goes from ₹50,000 to ₹56,000, the hike is 6,000 ÷ 50,000 × 100 = 12%. To go the other way and find your new salary, multiply the old salary by (1 + hike ÷ 100): ₹6,50,000 with an 8% hike becomes ₹7,02,000. The Percentage Calculator does both: use % change from X to Y for the hike percentage and Add X% to Y for the new salary.
Formula 1: Hike percentage from old and new salary
Use this when you already have your revised offer or appraisal letter and want to know what the increase really is.
Hike % = (New − Old) ÷ Old × 100
Always divide by the old salary. Dividing by the new one gives a smaller number that is not your hike.
Example: monthly salary
- Old salary: ₹50,000 a month
- New salary: ₹56,000 a month
- Increase: ₹6,000
- Hike: 6,000 ÷ 50,000 × 100 = 12%
Example: annual CTC in lakhs
- Old CTC: 6 LPA (₹6,00,000)
- New CTC: 6.9 LPA (₹6,90,000)
- Hike: 90,000 ÷ 6,00,000 × 100 = 15%
It does not matter whether you use monthly or annual figures, as long as both numbers are for the same period. Mixing a monthly old salary with an annual new one is the most common mistake.
Doing it with the calculator
Type numbers without commas or the ₹ sign. The box accepts plain numbers.
Formula 2: New salary after a given hike
Use this when your manager tells you "you are getting 8%" and you want the rupee figure.
New salary = Old salary × (1 + Hike ÷ 100)
Example
- Current CTC: ₹6,50,000
- Hike: 8%
- Increase: 6,50,000 × 0.08 = ₹52,000
- New CTC: 6,50,000 × 1.08 = ₹7,02,000
Doing it with the calculator
Formula 3: Hike needed to reach a target salary
Say you earn ₹40,000 a month and want ₹50,000 at your next job. The hike you need is (50,000 − 40,000) ÷ 40,000 × 100 = 25%. Enter 40000 and 50000 into % change from X to Y to check it.
This is useful when a recruiter asks "what hike are you expecting?". Answer with the figure that gets you to your target, not a round number picked at random.
Why two 10% hikes are not 20%
Hikes compound, because each year's percentage is applied to the already-raised salary.
| Year | Hike | Salary |
|---|---|---|
| Start | — | ₹50,000 |
| After year 1 | 10% | ₹55,000 |
| After year 2 | 10% | ₹60,500 |
Over two years the salary rose from ₹50,000 to ₹60,500, which is a 21% total increase, not 20%. The calculator confirms it: % change from 50000 to 60500 = 21.00%. Over many years the gap grows, so an 8% raise every year adds up to much more than eight times 8%.
The same logic explains why a pay cut followed by an equal raise does not bring you back to where you started. If ₹45,000 is cut to ₹42,000, that is a 6.67% fall (the calculator shows −6.67%), but a 6.67% raise on ₹42,000 lands slightly short of ₹45,000. The guide on why a 50% loss needs a 100% gain explains this in detail.
Hike on CTC vs hike on in-hand salary
Companies usually quote the hike on CTC (cost to company). Your in-hand (take-home) salary will not rise by the same percentage, for several reasons:
- Part of CTC goes to employer PF, gratuity and insurance, which you do not receive monthly.
- A higher salary can move you into a higher income tax slab, so more tax is deducted.
- Some components, such as variable pay or a joining bonus, may be included in the new CTC but paid later or only if targets are met.
So a 15% CTC hike can mean a smaller rise in what reaches your bank account. To see the effect, put both the old and new CTC into the Salary Calculator and compare the in-hand results, then use the percentage calculator on the two in-hand figures.
Also check that the old and new CTC are built the same way. If last year's figure excluded variable pay and this year's includes it, the "hike" looks bigger than the actual increase in fixed pay. Compare fixed with fixed.
Is your hike beating inflation?
A hike only increases what you can buy if it is higher than inflation. A quick way to estimate your real hike:
Real hike ≈ (1 + hike) ÷ (1 + inflation) − 1
With an 8% hike and 5% inflation: 1.08 ÷ 1.05 − 1 = 0.0286, or about 2.9% in real terms. Subtracting (8 − 5 = 3%) gives a close but slightly high answer. Use the inflation figure relevant to your own spending; the 5% here is only an example.
Common mistakes
- Dividing by the new salary. ₹6,000 ÷ ₹56,000 = 10.7%, which understates the 12% hike.
- Mixing monthly and annual numbers. Convert both to the same period first.
- Adding hikes year by year. Use the compounded total, as shown in the table above.
- Comparing CTC with in-hand. A hike quoted on CTC tells you little about your monthly take-home on its own.
- Ignoring one-time payments. A joining bonus or relocation allowance is not part of your ongoing salary and should not be counted in the hike.
Quick reference
| Old salary | New salary | Hike |
|---|---|---|
| ₹50,000 | ₹52,000 | 4% |
| ₹50,000 | ₹56,000 | 12% |
| ₹40,000 | ₹50,000 | 25% |
| ₹6,00,000 | ₹6,90,000 | 15% |
| ₹50,000 | ₹60,500 | 21% |
For other everyday calculations such as "what percent of" and percentage decrease, see percentage formulas explained with examples.
Frequently asked questions
How do I calculate my salary hike percentage?
Subtract the old salary from the new one, divide by the old salary and multiply by 100. From ₹50,000 to ₹56,000 is 6,000 ÷ 50,000 × 100 = 12%.
What will my salary be after an 8% hike?
Multiply your current salary by 1.08. A CTC of ₹6,50,000 becomes ₹7,02,000, an increase of ₹52,000.
Are two 10% hikes the same as a 20% hike?
No. The second hike applies to the already-raised salary, so ₹50,000 becomes ₹55,000 and then ₹60,500, a total increase of 21%.
Why did my in-hand salary not rise by the hike percentage?
Hikes are usually quoted on CTC, which includes employer PF, gratuity and sometimes variable pay. Higher income can also mean more tax deducted, so take-home pay usually rises by a smaller percentage.
How much hike do I need to reach a target salary?
Divide the gap by your current salary. Going from ₹40,000 to ₹50,000 needs (50,000 − 40,000) ÷ 40,000 × 100 = 25%.
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