Salary Hike Calculator
Turn a hike percentage into the new salary, the monthly difference, what the same hike compounds to over several years, and what it is worth after inflation.
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A hike percentage is easy to convert into a new salary. What it turns into in your bank account, and what it is worth after inflation, is where the arithmetic gets interesting.
The basic conversion
New salary = current salary × (1 + hike ÷ 100). A ₹6,00,000 CTC with a 15% hike becomes ₹6,90,000, an extra ₹90,000 a year or ₹7,500 a month.
| Hike on ₹6,00,000 | New salary | Extra per month | After 3 such years |
|---|---|---|---|
| 5% | ₹6,30,000 | ₹2,500 | ₹6,94,575 |
| 10% | ₹6,60,000 | ₹5,000 | ₹7,98,600 |
| 15% | ₹6,90,000 | ₹7,500 | ₹9,12,525 |
| 20% | ₹7,20,000 | ₹10,000 | ₹10,36,800 |
| 25% | ₹7,50,000 | ₹12,500 | ₹11,71,875 |
| 30% | ₹7,80,000 | ₹15,000 | ₹13,18,200 |
Going the other way — the hike you need to reach a target — is (target ÷ current − 1) × 100. From ₹6,00,000 to ₹8,00,000 is a 33.33% hike, not the 25% that ₹2,00,000 on ₹8,00,000 suggests. Always divide by the current figure.
Hikes compound; they do not add
Three years of 15% is not 45%. Each year's increase is applied to the previous year's salary, so ₹6,00,000 becomes ₹9,12,525 — a 52.1% rise, against ₹8,70,000 if the increases were simply added. Five years of 10% is 61.1%, not 50%. This is why a slightly higher hike early in a career is worth more than the same percentage later: it raises the base every later hike is computed on.
What a 15% hike does to take-home
CTC and in-hand move by different percentages, because PF scales with basic and income tax is progressive. Using the in-hand salary calculator's rules — basic at 40% of CTC, PF on actual basic, Karnataka professional tax, the new regime for FY 2025-26:
| CTC | Monthly in-hand before | After a 15% hike | In-hand change |
|---|---|---|---|
| ₹12,00,000 → ₹13,80,000 | ₹90,200 | ₹98,056 | +8.7% |
| ₹20,00,000 → ₹23,00,000 | ₹1,36,097 | ₹1,53,250 | +12.6% |
The ₹12 lakh row is the one to notice. Up to a ₹12.75 lakh salary the Section 87A rebate makes income tax zero; the hike carries this person past that line, tax starts, and a 15% raise on paper lands as 8.7% in hand. A 30% hike from ₹10 lakh to ₹13 lakh, by contrast, comes through almost intact at 30.1% because the rebate covered both ends of the old salary and only the last slice of the new one is taxed. Run your own figures before comparing offers on CTC alone.
The real hike
A 15% hike with 6% inflation is not a 9% real increase. The purchasing-power change is (1.15 ÷ 1.06 − 1) × 100 = 8.49%. The gap between the subtraction and the division grows with inflation: at 10% inflation, a 15% hike is worth 4.55% in real terms, not 5%. The calculator's inflation slider reports the divided figure.
Reading an offer letter
- Hike on CTC vs hike on fixed pay. If variable pay grows from 10% to 20% of CTC, a "30% hike" can leave your monthly credit almost unchanged. Compare fixed components.
- Joining bonus is not salary. It is paid once, often clawed back if you leave within a year, and does not compound into next year's hike.
- A change in basic changes PF. Higher basic means more retirement corpus and less cash now; see the EPF calculator.
What this calculator assumes
The same percentage every year for the compounding figure, a single inflation rate, and no change to how the CTC is split. The in-hand comparison above uses the site's tax rules for FY 2025-26; your state's professional tax and your regime choice will move the numbers slightly.
Salary Hike — frequently asked questions
How do I calculate a salary hike percentage?
Hike % = (new salary − current salary) ÷ current salary × 100. Going from ₹6,00,000 to ₹8,00,000 is (2,00,000 ÷ 6,00,000) × 100 = 33.33%. Divide by the current figure, not the new one — dividing by ₹8,00,000 would wrongly give 25%.
What is the new salary after a 15% hike on ₹6 lakh?
₹6,00,000 × 1.15 = ₹6,90,000, an extra ₹90,000 a year or ₹7,500 a month. Three consecutive 15% hikes take it to ₹9,12,525, not ₹8,70,000, because each year’s increase is applied to the previous year’s higher salary.
Why did my in-hand salary rise less than my hike?
PF scales with basic and income tax is progressive, so take-home and CTC move by different percentages. A 15% hike from ₹12 lakh to ₹13.8 lakh raises monthly in-hand from ₹90,200 to ₹98,056 — 8.7% — because the salary crosses the ₹12.75 lakh line where the Section 87A rebate ends and income tax begins. The same 15% on ₹20 lakh comes through as 12.6%.
What is a good salary hike in India?
Annual increments for most salaried employees have run at 8–10% in recent years, with promotions and job changes commonly bringing 20–40%. Judge a hike against inflation rather than the average: a 15% hike at 6% inflation is a real increase of 8.49%, and a 6% hike at 6% inflation is a real increase of zero.
How is the real hike after inflation calculated?
Divide, do not subtract: real hike = (1 + hike) ÷ (1 + inflation) − 1. At 15% hike and 6% inflation that is 1.15 ÷ 1.06 − 1 = 8.49%. Subtracting gives 9%, which overstates the gain, and the error grows as inflation rises.
Does a hike on CTC mean the same hike in monthly salary?
Only if every component grows in the same proportion. If the offer moves money into variable pay, raises the employer PF share or adds a one-time joining bonus, the fixed monthly credit can rise much less than the headline. Compare fixed pay to fixed pay, and run both CTCs through an in-hand calculator.
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Related calculators
In-Hand Salary Calculator
Turn a CTC offer into the amount that actually reaches your bank account — PF, professional tax by state, and income tax under both regimes, for FY 2025-26 (AY 2026-27).
Old vs New Tax Regime Calculator
Which regime leaves you with more money, for FY 2025-26 (AY 2026-27) — with the break-even deduction figure that decides it.
Inflation Calculator
See what an amount of money is worth across time at a chosen average annual inflation rate — project forward to 2076 or look back to 1950.
EPF Calculator
Project your Employees’ Provident Fund balance at retirement — the 12% + 12% split, the EPS pension share, yearly interest credit and what a VPF top-up adds.
Results from this calculator are estimates for informational use only — not financial, medical, or professional advice. Read our full disclaimer before acting on any number you see here.