Pay Rise Calculator: Formula, Example and What the Result Means
Shows what a percentage pay rise means in dollars, before and after tax. This guide walks through what each input means, the formula behind the answer and a worked example using typical Australian figures. You can follow along in the free Pay Rise Calculator.
Why it matters
Australia taxes individuals on a progressive scale, so each extra dollar can be taxed at a different rate from the last. On top of income tax, most residents pay the 2% Medicare levy, and many carry HELP debts that are repaid through the tax system. Employers withhold tax from each pay under PAYG, and the annual tax return squares up the difference.
What you need to enter
The calculator asks for 2 inputs. The table shows each one with the example value used later in this guide.
| Input | Example value |
|---|---|
| Current salary ($) | 80000 |
| Pay rise (%) | 5 |
The formula
New salary = salary × (1 + rise ÷ 100). The after-tax increase compares take-home pay at both salaries.
Worked example
Entering the example values above gives these results:
| Result | Value |
|---|---|
| Take-home increase per year | $2,720.00 |
| New salary | $84,000.00 |
| Gross increase | $4,000.00 |
| Take-home increase per fortnight | $104.62 |
The headline figure is $2,720.00 (take-home increase per year). Change any input in the calculator and every result updates instantly, so you can test different scenarios side by side.
How the take-home increase per year changes with current salary
The table below keeps every other input at the example value and moves only “Current salary ($)” up and down by 10% and 20%. It shows how sensitive the take-home increase per year is to that one figure.
| Current salary ($) | Take-home increase per year |
|---|---|
| 64,000 | $2,136.00 |
| 72,000 | $2,448.00 |
| 80,000 | $2,720.00 |
| 88,000 | $2,992.00 |
| 96,000 | $3,264.00 |
At 64,000 the result is $2,136.00; at 96,000 it is $3,264.00. If a small change in this input moves the answer a lot, it is worth double-checking that figure before you rely on the result.
A practical tip
Compare a pay rise with the inflation rate. A rise below inflation is a real pay cut.
Keep going
Before relying on the number, read Pay Rise: What to Check Before You Trust the Number. You might also find these guides useful:
- Using a Leave Loading Calculator in Australia: A Step-by-Step Guide
- Redundancy Pay Calculator Explained for Australians
- How the Long Service Leave Calculator Works (With a Worked Example)
Frequently asked questions
- Are these results exact?
- They are estimates based on standard resident rates. Your actual tax depends on your full circumstances, offsets and any private health insurance position. The ATO’s own tools or a registered tax agent give a definitive answer.
- Do the calculators work for non-residents?
- No. Non-residents have different rates, no tax-free threshold and no Medicare levy. These calculators assume you are an Australian resident for tax purposes.
- When do tax rates change?
- Rates usually change on 1 July, the start of the Australian financial year. Check the ATO website each July for the current figures.
Run your own numbers in the Pay Rise Calculator.
Open the calculatorGeneral information only. Rates and thresholds change, usually on 1 July. Confirm current figures with the ATO or the relevant authority, and get personal advice for decisions about your situation.