Why a raise is smaller after tax
Every dollar of a raise sits on top of the pay you already had, so it is taxed at your marginal rates: the federal bracket your income reaches, Social Security and Medicare, and your state's top rate on your income. Those are usually higher than the average rate on your whole paycheck, which is why a raise of 5% tends to lift take-home pay by noticeably less than 5%. The calculator runs the full paycheck twice, once on your current pay and once on the new pay, and reports the difference, so a raise that crosses into a higher bracket or past the Social Security wage base is handled exactly.
A raise never shrinks the pay you already had
A common worry is that a raise will "bump you into a higher bracket" and leave you worse off. It cannot, at least for the taxes this calculator covers. U.S. income tax brackets apply only to the dollars inside each band, so moving into the 22% bracket taxes the dollars above the line at 22% and leaves everything below it where it was. The share of a raise you keep is lower than the share of your current pay you keep, but it is always well above zero.
What can make a raise cost money is not tax brackets but programs with income limits: Medicaid, health insurance premium credits, or the earned income credit. Near one of those limits, a raise can reduce a benefit by more than it adds in pay. This calculator does not model them, so if you receive one, check its income limit before negotiating.
Worked example
A single filer in a state with no wage tax earns $60,000 a year, paid every two weeks, and gets a 5% raise to $63,000 in 2026. After the $16,100 standard deduction, taxable income moves from $43,900 to $46,900, all of it inside the 12% bracket, so federal income tax rises by $360. Social Security takes 6.2% of the raise ($186) and Medicare 1.45% ($43.50). Take-home pay rises by $2,410.50 a year, or about $92.71 per paycheck: the worker keeps 80.3% of the $3,000 raise, and 19.7% goes to tax.
Paid by the hour instead? A $1 raise at 40 hours a week is $2,080 a year of gross pay (40 × 52), and the calculator converts it the same way: enter your hourly rate and the dollar raise, and it shows the new hourly rate alongside the annual and per-paycheck figures.
Percent or dollars
Raises are quoted both ways, so the calculator takes either. A percentage raise multiplies your current pay; a dollar raise is added to it, per hour for hourly workers and per year for salaried ones. To turn a dollar raise into a percentage, divide it by your current pay: $3,000 on $60,000 is 5%. A cost-of-living adjustment is simply a percentage raise.
What this calculator leaves out
It estimates federal tax with the standard deduction and the year's brackets, the same way the paycheck calculator does, without 401(k) or other pre-tax deductions. If you contribute a percentage of pay to a 401(k), that contribution grows with the raise too, which lowers the take-home gain but adds to your savings. Local income taxes are not included.