Salary Inflation Calculator
Is your salary keeping up with inflation? This is an online salary inflation calculator that gives you an answer. You can use our wage inflation calculator to determine if your wage is keeping pace with inflation.
How does the salary inflation calculator work?
Let’s see how this calculator works with an example.
Let’s say the year inflation rate was 3%, which means that the overall price level has increased by 3% in a year. If your monthly salary was $4,000 and in the next year it rose to $4,100 per month, you can calculate if your wage is keeping pace with inflation with the following steps.
First, find the inflation-adjusted salary with the following formula:
Inflation-adjusted salary = $4,000 * (1 + 0.03) = $4,120
Second, find the actualized earning by performing a deduction:
Actualized earning - Inflation adjusted salary = $4,100 - $4,120 = -$20
If the resulting value is positive you gain, if it’s negative, then you lose money in real terms.
In this example, the result is -$20, which means your salary is not keeping pace with inflation.
How to use the salary inflation calculator?
- Input the salary in the reference period.
- Input the annual inflation rate.
- Input your current salary.
The inflation-adjusted salary and your gain/loss will appear in the bottom part of the calculator.