How to Check if Your Raise Beat Inflation in Real Terms Inflation-adjusted change
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I got a % raise, but annual inflation is %. Did my raise really beat inflation, and by how much?
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Answer: Your raise's real value change is
%.
Calculation type: Comparing a pay raise with inflation to find the real change in your buying power. Watch out: Simply subtracting the rates (5% − 3% = 2%) is only an approximation. The exact real change is 1.94%, because inflation applies to your already-raised salary. Formula explanation:
Real change = ((1 + Raise / 100) / (1 + Inflation / 100) − 1) × 100
Real change = ((1 + 5/100) / (1 + 3/100) − 1) × 100 ≈1.94%