How much of your raise you keep
A raise is taxed at your marginal rate — the federal bracket your top dollars fall in, plus Social Security and Medicare (7.65%) and your state’s top rate. That is why a $3,000 raise rarely adds $3,000 to your take-home pay. In 2026, a single filer in a state without income tax keeps about 68%–80% of a raise, depending on income; in high-tax states like California, Oregon and New York the figure is about 58%–75%.
| Raise | Gross raise / year | Take-home raise / year | Per paycheck | You keep |
|---|---|---|---|---|
| 2% | $1,200 | +$964 | +$37.08 | 80% |
| 3% | $1,800 | +$1,446 | +$55.63 | 80% |
| 4% | $2,400 | +$1,928 | +$74.17 | 80% |
| 5% | $3,000 | +$2,411 | +$92.71 | 80% |
| 7% | $4,200 | +$3,375 | +$129.80 | 80% |
| 10% | $6,000 | +$4,821 | +$185.42 | 80% |
| 15% | $9,000 | +$6,982 | +$268.52 | 78% |
| 20% | $12,000 | +$9,092 | +$349.69 | 76% |
Percentage raise vs. new salary offer
Use percentage raise for an annual merit increase, new salary amount to compare a job offer or promotion with your current pay, and raise per hour if you are paid hourly. Remember that 401(k) contributions are a percentage of pay, so a raise also increases your retirement savings — the calculator shows that separately.
Does a raise affect benefits or credits?
Some benefits phase out as income rises — for example the Earned Income Tax Credit, ACA premium subsidies or state exemptions. These are settled on your tax return, not in withholding, so check them separately if you are near a phase-out.
Frequently asked questions
How do I calculate a pay raise?
Multiply your current salary by the raise percentage and add it to your salary. A 5% raise on $60,000 is $3,000, for a new salary of $63,000. To see what that means for your paycheck, the calculator above subtracts federal, state and payroll taxes on the extra pay.
How much of a 5% raise will I actually take home?
On a $60,000 salary, a 5% raise ($3,000) adds about $2,411 a year to take-home pay in Texas, $2,236 in New York and $2,192 in California for a single filer — roughly $92.71 per biweekly paycheck in Texas.
Can a raise put me in a higher tax bracket and lower my pay?
No. US income tax brackets are marginal: only the dollars above a bracket threshold are taxed at the higher rate. A raise always increases take-home pay, though you keep less of each extra dollar.
What is a good raise percentage in 2026?
Typical merit raises are around 3%–4%. A raise below the inflation rate means your purchasing power still falls. Promotions and job changes commonly bring 10%–20%.
How do I calculate a raise from an hourly wage?
Choose “Raise in dollars per hour”: each $1/hour raise adds $2,080 a year for a full-time (40 hours × 52 weeks) worker before taxes.
Sources
- IRS: 2026 inflation adjustments (Rev. Proc. 2025-32)
- IRS Publication 15-T (federal withholding methods)
- SSA: 2026 Social Security wage base ($184,500)
- Tax Foundation: 2026 State Income Tax Rates and Brackets
Rates last verified October 31, 2026 by Easy Paycheck Calculator Editorial Team. See the methodology for every formula.