What is the Salary Hike?
A salary hike is straightforward arithmetic, but the number that matters is the real hike — your increment minus inflation. A 6% raise when inflation is 6% leaves your purchasing power exactly where it was.
The projection table shows the compounding effect of repeated increments, and — in the last column — what each future salary is actually worth in today's rupees.
Formula & worked example
Nominal and real:
Real hike = hike% − inflation%
Today's value = Future salary / (1 + inflation)n
Worked example: ₹12,00,000 with a 15% hike → ₹13,80,000, an increase of ₹1.8 lakh or ₹15,000 a month. With inflation at 6%, the real hike is 1.15 ÷ 1.06 − 1 = 8.49% — the quick "15 − 6 = 9%" slightly overstates it — so the new salary is worth ₹13,01,887 in today's money, about ₹1.02 lakh more purchasing power. Repeated for five years, the salary reaches ₹24.1 lakh — but only about ₹18 lakh in today's money.
Hike table: new salary at common increments
Annual CTC after the hike, with the monthly increase in brackets. Every cell is this calculator's output.
| Current CTC | 8% hike | 10% hike | 15% hike | 30% hike (job switch) |
|---|---|---|---|---|
| ₹3,60,000 | ₹3,88,800 (+₹2,400/mo) | ₹3,96,000 (+₹3,000/mo) | ₹4,14,000 (+₹4,500/mo) | ₹4,68,000 (+₹9,000/mo) |
| ₹6,00,000 | ₹6,48,000 (+₹4,000/mo) | ₹6,60,000 (+₹5,000/mo) | ₹6,90,000 (+₹7,500/mo) | ₹7,80,000 (+₹15,000/mo) |
| ₹10,00,000 | ₹10,80,000 (+₹6,667/mo) | ₹11,00,000 (+₹8,333/mo) | ₹11,50,000 (+₹12,500/mo) | ₹13,00,000 (+₹25,000/mo) |
| ₹15,00,000 | ₹16,20,000 (+₹10,000/mo) | ₹16,50,000 (+₹12,500/mo) | ₹17,25,000 (+₹18,750/mo) | ₹19,50,000 (+₹37,500/mo) |
| ₹25,00,000 | ₹27,00,000 (+₹16,667/mo) | ₹27,50,000 (+₹20,833/mo) | ₹28,75,000 (+₹31,250/mo) | ₹32,50,000 (+₹62,500/mo) |
These are gross (CTC) figures. Your in-hand increase is smaller once tax, EPF and any variable-pay share come out — run the new CTC through the CTC to in-hand calculator for the take-home number.
How to calculate the hike % between two salaries
- Offer letter: ₹8,50,000 now, ₹11,00,000 offered → (11,00,000 − 8,50,000) ÷ 8,50,000 × 100 = 29.41%. Enter ₹8,50,000 with a 29.41% hike above and the calculator returns ₹10,99,985 — the ₹15 gap is just the rounding in 29.41%.
- Monthly salary: ₹30,000 a month with a 10% hike becomes ₹33,000 — ₹3,000 more each month.
- Working backwards: to earn ₹15,00,000 from ₹12,00,000 you need a 25% hike (3 ÷ 12 × 100).
In Excel or Google Sheets, with the old salary in A2 and the new one in B2: =(B2-A2)/A2, formatted as a percentage.
A CTC hike is not always a fixed-pay hike
Offers often grow the variable part faster than the fixed part. Say your ₹12,00,000 CTC is ₹10,80,000 fixed plus ₹1,20,000 variable, and the new CTC is ₹13,80,000 with ₹2,40,000 variable. The headline hike is 15%, but fixed pay moves from ₹10,80,000 to ₹11,40,000 — a 5.56% hike on the money you are sure to receive. With 6% inflation that fixed pay is actually worth slightly less than before (the calculator shows a real hike of −0.42%). Always ask for the fixed-pay figure and compare that.
What a hike is really worth after inflation
| Hike | Inflation | Real hike | What it means |
|---|---|---|---|
| 8% | 6% | 1.89% | Barely ahead of prices |
| 10% | 6% | 3.77% | A modest real raise |
| 15% | 6% | 8.49% | A genuine step up |
| 30% | 6% | 22.64% | Typical of a job switch |
Real hike here is the exact figure, (1 + hike) ÷ (1 + inflation) − 1. Use your own inflation, not the headline CPI: if rent and school fees make up most of your spending and they rose 10%, a 10% hike left you where you were.
Before you accept the number
- Check whether joining bonuses or retention bonuses have a clawback if you leave within a year.
- Compare benefits that sit outside CTC: health cover for parents, WFH allowance, ESOP vesting schedules.
- Ask when the next appraisal cycle is. Joining in January with an April cycle may mean no hike for 15 months.
How to use this salary hike calculator
- Enter your current annual salary or CTC.
- Enter the hike percentage offered.
- Set inflation — India's CPI has averaged 5–6% recently.
- Use the table to see whether repeated increments actually build wealth or just track prices.
Smart tips
- Anything below inflation is a real pay cut, no matter how the increment letter is worded.
- Job switches typically deliver 20–40% versus 8–12% for internal increments — the single biggest lever on lifetime earnings.
- Compare offers on fixed in-hand, not CTC. A high-variable package can mean less real money.
- Raise your SIP by the full increment amount before lifestyle absorbs it — this is what a step-up SIP automates.
Frequently asked questions
How do I calculate a salary hike percentage?
Divide the increase by your old salary and multiply by 100. From ₹12 lakh to ₹13.8 lakh: (1.8 / 12) × 100 = 15%.
What is a good salary hike in India?
Internal increments average 8–12%. Switching jobs typically brings 20–40%. Anything under inflation is effectively a cut.
Is a 30% hike on switching worth it?
Usually yes financially, but check fixed versus variable split, the new role's stability, and any notice-period or joining-bonus clawback.
How does inflation affect my raise?
It erodes it directly. A 10% hike with 6% inflation is a real gain of about 3.8% (1.10 ÷ 1.06 − 1), which is what actually improves your standard of living.
How much is a 10% hike on a ₹30,000 salary?
₹3,000 a month, taking the salary to ₹33,000 a month or ₹3,96,000 a year.
Is a hike calculated on CTC or on basic salary?
Offer letters and appraisals usually quote the hike on CTC. Some components, such as EPF and gratuity, are then recalculated on the new basic, so the in-hand increase can be a different percentage from the CTC hike.
How do I calculate hike percentage in Excel?
Put the old salary in A2 and the new salary in B2, then use =(B2-A2)/A2 and format the cell as a percentage. ₹8,50,000 to ₹11,00,000 returns 29.41%.
Want the theory behind the numbers? Browse the Money Blog for worked guides.
Written by Gurjeet Singh, Sharpen Solutions. Last reviewed 30 Sep 2026. How we check these numbers.