# How To Calculate a Salary Increase

Even with the economic recession still in our midst, asking for a salary increase or raise should never be out of the question.  Look, if you deserve it, go for it.  Of course, you still have to be realistic when it comes to this delicate situation.  Remember, employers will not have any qualms letting you go due to the fact that there are tons of skilled people in the market right now who can easily replace.  Well, if you think you are irreplaceable and deserve a raise from your boss, then consider doing your due diligence first by calculating the salary increase you deserve which is both realistic and in line with the standards of the economy.  Here are some tips on how to do just that.

• Determine the number of years.  The first step in computing the salary increase you will ask for is to figure out how long you have been working for your employer.  This will provide you some insight on how much, in dollar and percentages, more money will you ask for.  Obviously, if you have worked for at least a decade and have been neglected in terms of salary increases, then you might want to bump your demand to a higher amount.
• Evaluate your efforts.  Another option to help you discover your worth in terms of salary increase is to figure out your contributions to the overall success of the company.  For instance, if you are in sales and have brought in a couple million dollars in revenue when you were on expected to bring in half a million, then obviously, you can demand a higher increase in pay.
• Calculate it.  With everything taken into consideration, get the percentage of the increase you desire.  Typically, 5 to 15 percent increases are pretty much standards in most companies.  If you want to convert the percentage to a specific dollar amount, then take your existing salary and multiply the percentage with it.  For instance, if your annual salary \$75000 and you are looking for 15 percent bump, then multiplying 75000 by 0.15 will get you 11250.  Hence, the 15 percent bump in your salary will be equivalent to \$11,250.  So, the total amount you will be asking for is \$75,000 plus \$11,250.  Surprise your boss now with a demand of \$86,250.
• Compare it.  Now before you bring it to your boss, you will want to compare it with the current inflation rate in the economy as you want to determine if the increase in salary will be proportional to the increase in your buying power.  If you are asking for 15 percent bump, you will be alright for as long as the inflation rate does not reach 15 percent or more otherwise you will be definitely screwed.
• Justify it.  Make sure that when you enter the negotiation table for your salary increase you are prepared to justify your increase.  Bring up your years of service and total revenue or contributions that you have brought in over the years to the company.  In addition, be prepared to accept a lower rate adjustment since your employer will most likely haggle your rate.  If you keep at your desired rate, you may find yourself out of a job soon enough.

Knowing how to calculate salary increases is beneficial to both the employer and the employee.  It can be used both ways and most of the time, it is the employer that usually works the computations out effectively.  Remember, from their point of view, there are other factors to consider such as return of investments, projections, and maturation of loans.