In this article
A salary hike is a percentage increase on your current pay. The arithmetic is simple, but three questions usually follow: what is my new monthly salary, what will a string of hikes add up to, and is the raise actually beating the rise in prices? This guide answers all three with real numbers.
The formula
Convert the percentage to a multiplier by adding it to 1. A 15% hike is 1.15. Multiply your current yearly salary (or CTC) by that number to get the new figure. Divide by 12 for the monthly amount.
- 1Start with the yearly salary₹6,00,000 a year.
- 2Find the multiplier1 + 15 ÷ 100 = **1.15**.
- 3Multiply₹6,00,000 × 1.15 = **₹6,90,000**.
- 4Work out the monthly figures₹6,90,000 ÷ 12 = **₹57,500**, which is **₹7,500** more per month.
The tool shows four numbers: new yearly salary, the increase per year, the new monthly figure and the increase per month.
What different hikes look like
| Hike | New yearly salary | Extra per year | New monthly | Extra per month |
|---|---|---|---|---|
| 5% | ₹6,30,000 | +₹30,000 | ₹52,500 | +₹2,500 |
| 8% | ₹6,48,000 | +₹48,000 | ₹54,000 | +₹4,000 |
| 10% | ₹6,60,000 | +₹60,000 | ₹55,000 | +₹5,000 |
| 12% | ₹6,72,000 | +₹72,000 | ₹56,000 | +₹6,000 |
| 15% | ₹6,90,000 | +₹90,000 | ₹57,500 | +₹7,500 |
| 20% | ₹7,20,000 | +₹1,20,000 | ₹60,000 | +₹10,000 |
| 25% | ₹7,50,000 | +₹1,50,000 | ₹62,500 | +₹12,500 |
| 30% | ₹7,80,000 | +₹1,80,000 | ₹65,000 | +₹15,000 |
All rows start from ₹6,00,000 a year. Every extra 5 percentage points adds about ₹2,500 a month at this salary.
A hike of 15% adds ₹7,500 a month at this salary. The relationship is a straight line: double the percentage and the monthly gain doubles.
Hikes compound over the years
Each hike applies to the salary you already have, so the second hike is worth more than the first in rupees. Ten years of 10% is not 100% growth. It is 1.10 multiplied by itself ten times, which is about 2.59 times your starting salary.
After ten years, 10% a year gives ₹15.56 L and 5% gives ₹9.77 L. The gap keeps widening because hikes build on earlier hikes.
Is your raise beating inflation?
A hike only helps if prices rise more slowly than your pay. The real growth rate is (1 + hike) ÷ (1 + inflation) − 1. If you got 8% and prices rose 6%, your buying power grew by about 1.9%, not 2%.
| Hike | If inflation is 4% | If inflation is 5% | If inflation is 6% | If inflation is 7% |
|---|---|---|---|---|
| 6% | 1.92% | 0.95% | 0.00% | -0.93% |
| 8% | 3.85% | 2.86% | 1.89% | 0.93% |
| 10% | 5.77% | 4.76% | 3.77% | 2.80% |
| 12% | 7.69% | 6.67% | 5.66% | 4.67% |
| 15% | 10.58% | 9.52% | 8.49% | 7.48% |
Real hike after inflation. A hike lower than inflation is a pay cut in what your money can buy.
- Pay grows faster than prices
- Savings goals get easier
- A hike you can feel
- Pay only keeps pace with prices
- Nothing extra to save
- Feels like standing still
Use the Inflation Calculator to see how much a rupee today is worth in the future.
Working backwards: what hike do you need?
If you know the salary you want, divide it by your current salary and subtract 1. This is useful in negotiations, because it tells you how big the ask really is in percentage terms.
| Target salary | Hike needed | Extra per year |
|---|---|---|
| ₹7,00,000 | 16.7% | +₹1,00,000 |
| ₹8,00,000 | 33.3% | +₹2,00,000 |
| ₹9,00,000 | 50.0% | +₹3,00,000 |
| ₹10,00,000 | 66.7% | +₹4,00,000 |
All targets start from ₹6,00,000. The percentage needed grows quickly: a target of 10 L is a 66.7% hike from this base.
A hike on CTC is not a hike in take-home pay
The hike percentage usually applies to your CTC (cost to company). Your monthly in-hand pay is lower, because PF contributions, professional tax, income tax and sometimes insurance come out first. A bigger CTC can also push part of your income into a higher tax slab, so the take-home increase can be a little smaller than the CTC increase. Use the In-Hand Salary Calculator to see the actual monthly effect.
Using the numbers well
- Calculate the new yearly and monthly figures so you can compare offers on the same basis.
- Check the real growth against current inflation before you call it a good hike.
- Plan the extra income. Decide in advance how much of the monthly increase goes to savings or an SIP.
- Keep a record of each hike and the date, so you can see your pay history over time.
- Compare job offers on total pay, not just on the headline percentage.
Questions people ask
How do I calculate my new salary after a hike?
Multiply your current salary by 1 plus the hike percentage as a decimal. A 15% hike on 6,00,000 gives 6,00,000 × 1.15 = 6,90,000 a year.
How do I find the monthly increase from a hike?
Subtract the old salary from the new one and divide by 12. A rise from 6,00,000 to 6,90,000 is 90,000 a year, or 7,500 a month.
How do I calculate the hike percentage from two salaries?
Divide the new salary by the old one, subtract 1 and multiply by 100. Going from 6,00,000 to 7,50,000 is 7,50,000 ÷ 6,00,000 − 1 = 25%.
Is a 10% hike every year the same as a 100% hike in ten years?
No. Hikes compound, so ten years at 10% a year gives about 2.59 times the starting salary, a 159% rise, not 100%.
What is a good salary hike?
A good hike beats inflation by a clear margin. If prices rise 6% a year, a 6% hike only keeps your buying power the same. Anything above that is real growth. Typical hikes also vary by industry, role and company performance.
Does the Salary Hike Calculator show in-hand salary?
No. The Salary Hike Calculator works on your gross yearly salary or CTC. For take-home pay after deductions, use the in-hand salary calculator.