Understanding Your Raise
A raise sounds great on paper, but the actual impact on your paycheck depends on taxes and inflation. A 5% raise on a $70,000 salary adds $3,500/year gross, but after taxes you might only see about $2,500 more. And if inflation is 3%, your real purchasing power increase is only about 2%.
Frequently Asked Questions
What is a good raise percentage?â–¾
The average annual raise in the US is 3-4%. A raise of 5% or more is considered above average. Promotion-related raises typically range from 10-20%. To maintain purchasing power, your raise should at minimum match the inflation rate (currently around 3%).
Will my raise push me into a higher tax bracket?â–¾
The US uses progressive tax brackets, so only the income within each bracket is taxed at that rate. Moving into a higher bracket does not retroactively increase taxes on your previous income. Your overall effective tax rate may increase slightly, but you will always take home more money with a raise.
How do I negotiate a higher raise?â–¾
Come prepared with market data from salary surveys, document your accomplishments and impact, and time your ask around performance reviews or after completing a major project. Frame your request around the value you bring, not personal financial needs. If a salary increase is not possible, negotiate for other benefits like additional PTO, a signing bonus, or flexible work arrangements.
Calclypso Editorial Team
Reviewed by certified financial professionals. Last updated: April 2026. Tax estimates are simplified and may vary based on deductions and state taxes.