Work out your hike percentage and new salary, or go the other way and find the hike % from your old and new salary — plus a compounding projection of future salary.
How to calculate salary hike percentage
The formula is the same whichever direction you start from:
Hike % = ((New salary − Old salary) ÷ Old salary) × 100
If you know your current salary and the hike % (say, from an appraisal email), flip it around: New salary = Current salary × (1 + Hike % ÷ 100). Both directions use the same relationship — the calculator above runs whichever one matches the numbers you have.
Worked example: 10% hike on ₹6,00,000
A ₹6,00,000 annual salary with a 10% hike becomes ₹6,60,000 — a hike amount of ₹60,000, or ₹55,000 a month before any change in tax or deductions.
CTC hike vs in-hand salary hike — an important distinction
A company may announce a "12% hike" on CTC, but CTC bundles in things you don't receive as monthly cash — variable/bonus pay, employer PF, gratuity provision, insurance premiums. If the increase is weighted toward those components rather than your fixed monthly pay, the extra money in your bank account each month can grow by less than 12%, even though the CTC letter says 12%. Run your new CTC through the in-hand salary calculator to see the real monthly difference, not just the headline percentage.
Does a hike change your income tax?
Yes — a higher salary means higher taxable income, which can push part of it into a higher slab (only the incremental income is taxed at the higher rate, not the whole salary). Near certain thresholds it can also change whether a rebate applies. Use the income tax calculator to see your tax before and after the hike.
Why compounding matters over several years of hikes
A repeated annual hike compounds — each year's percentage applies to an already-larger salary, not the original figure. That's the same math as compound interest, applied to pay instead of savings. On ₹6,00,000 growing at a steady 10% a year: ₹7,98,600 after 3 years, ₹9,66,306 after 5 years, and ₹15,56,245 after 10 years — well above the ₹12,00,000 you'd reach by adding a flat ₹60,000 every year instead. The projection table above runs this on your own current salary and hike %.
Reverse calculation: finding hike % from two salary figures
If your appraisal letter shows only the old and new CTC — not a percentage — switch to "I know old & new salary" mode above. The calculator subtracts to get the hike amount, then divides by the old salary to get the percentage, so you can compare it against what colleagues or other companies report.
Frequently Asked Questions
How do I calculate salary hike percentage?
Hike percentage = ((New salary − Old salary) ÷ Old salary) × 100. For example, a salary that rises from ₹6,00,000 to ₹6,60,000 is a hike of ₹60,000, or (₹60,000 ÷ ₹6,00,000) × 100 = 10%. Use "I know old & new salary" mode above to run this in reverse on your own figures.
Is a "12% CTC hike" the same as a 12% in-hand salary hike?
Not necessarily. Companies usually announce a hike on
CTC (cost to company), but CTC includes components you don't see every month — variable pay, employer PF, gratuity provision, insurance. If a larger share of the increase lands in variable pay or employer-side benefits rather than your fixed monthly components, your actual monthly in-hand increase can end up smaller than the announced CTC hike %. Check your real take-home change with the
in-hand salary calculator.
Does a salary hike increase my income tax?
Yes, it can. A higher salary raises your taxable income, which can push a larger slice of it into a higher tax slab — or, if you're near a rebate threshold, reduce a rebate you were getting. It doesn't mean your whole salary is taxed at the higher rate, only the portion that falls in that slab. Recompute your tax after the hike with the
income tax calculator.
How much does compounding matter if I get the same hike % every year?
A lot, over time — because each year's hike applies to an already-larger salary, not the original one. A ₹6,00,000 salary growing at a steady 10% a year reaches about ₹7,98,600 in 3 years, ₹9,66,306 in 5 years and ₹15,56,245 in 10 years — noticeably more than the ₹12,00,000 you'd get by simply adding ₹60,000 every year. The "Project future salary" table above runs this compounding on your own numbers.
How do I find the hike % if I only know my old and new salary figures?
Switch to "I know old & new salary" mode above, enter both figures, and the calculator applies the same formula in reverse: Hike % = ((New − Old) ÷ Old) × 100. This is the everyday case when an appraisal letter gives you last year's and this year's CTC but never states the percentage.
Is the hike calculated on CTC, basic salary, or gross salary?
This calculator works on whatever figure you enter — most people use annual CTC since that's the number on appraisal letters, but the same formula applies equally to basic salary, gross salary or in-hand salary, as long as you stay consistent between the "old" and "new" figures you compare. Companies typically announce hikes on CTC.
Estimates are for information and education only — not financial, tax or investment advice. Verify current rates and rules with official sources.