How Salary Hike Math Works
The formula is simple but worth getting exactly right before an appraisal discussion: new salary = current salary × (1 + hike% ÷ 100), and in reverse, hike% = (new − old) ÷ old × 100. A jump from ₹6,00,000 to ₹7,50,000 is a 25% hike; from $80,000 to $92,000 is 15%. Note that the reverse direction is not symmetric — a 25% raise followed by a 20% cut does not return you to the start, which is why percentage comparisons between offers should always use the same base.
Two practical caveats: companies quote hikes on CTC, which includes employer PF, gratuity and variable pay — so a 20% CTC hike usually lifts monthly take-home by less than 20%. And the real value of any hike is measured against inflation: a 6% increment during 6% inflation keeps your purchasing power exactly flat. The 5-year projection table shows the compounding effect of consistent increments. To plan what to do with the raise, try the SIP Calculator, check your new tax with the Income Tax Calculator, or see loan affordability in the EMI Calculator.