Cost of Living Raise Calculator
Built & reviewed by Nandu Kannan · Overtime rules cited to primary statutes
Find the raise you need just to keep up with inflation — and check whether the raise you were offered is a real raise or a quiet pay cut. Enter your pay, the cost-of-living rate, and (optionally) the raise on the table.
A raise only grows your buying power if it beats inflation. The real raise = offered raise − inflation rate. Gross figures before tax. General information, not financial advice.
How a cost-of-living raise works
Pay needed = current pay × (1 + inflation% ÷ 100)
Real raise = offered raise% − inflation%
If prices rise 3.2% and your pay rises 3.2%, your buying power is flat. Only the
part of a raise above inflation actually makes you better off. That is why
comparing your raise to the current CPI matters more than the dollar figure.
Frequently asked questions
How do I calculate a cost-of-living raise?
Multiply your current pay by the inflation (cost-of-living) rate. If you earn $60,000 and inflation is 3.2%, you need $60,000 × 0.032 = $1,920 more — a new salary of $61,920 — just to keep the same buying power. Anything less is a real-terms pay cut.
Is my raise actually a raise after inflation?
Your real raise = the raise you were given − the inflation rate. A 3% raise in a 3.2% inflation year is a real raise of −0.2% — your money buys slightly less than before. A raise only grows your purchasing power when its percentage beats inflation.
What is a fair cost-of-living adjustment for 2026?
A fair cost-of-living adjustment (COLA) at least matches the year’s inflation rate so your buying power holds. Many employers tie COLAs to the Consumer Price Index (CPI). Check the current CPI figure and enter it above — if your raise is below it, you can make the case for more.
What inflation rate should I use?
Use the most recent year-over-year CPI (Consumer Price Index) from the U.S. Bureau of Labor Statistics for the closest match to general cost-of-living changes. The 3.2% default is an illustrative figure — replace it with the current CPI for your own number.
COLA vs merit raise — what is the difference?
A cost-of-living adjustment (COLA) keeps your pay level with inflation; it is not a reward for performance. A merit raise is extra, on top of a COLA, for your results. If your only raise barely matches inflation, you received a COLA, not a real merit increase.
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