A salary hike percentage compares the increase with the old salary. Keep both amounts on the same monthly or annual basis before applying the formula.
Salary hike formulas
Hike amount
Old salary × hike % ÷ 100
New salary
Old salary + hike amount
Hike percentage
(New − old) ÷ old × 100
Monthly equivalent
Annual amount ÷ 12
Example: calculate a 15% hike
For an annual salary of ₹6,00,000, a 15% hike is ₹90,000. The new annual salary is ₹6,90,000. Dividing by 12 gives a monthly equivalent of ₹57,500, up from ₹50,000.
| Measure | Before | Increase | After |
|---|---|---|---|
| Annual | ₹6,00,000 | ₹90,000 | ₹6,90,000 |
| Monthly equivalent | ₹50,000 | ₹7,500 | ₹57,500 |
Example: find the percentage from two salaries
If annual salary moves from ₹8,00,000 to ₹9,20,000, the increase is ₹1,20,000. Divide ₹1,20,000 by ₹8,00,000 and multiply by 100. The hike is 15%.
CTC, gross pay, and take-home pay are different
A percentage increase in CTC does not automatically produce the same percentage increase in monthly take-home pay. Variable pay, provident fund contributions, tax, insurance, professional tax, and changes in the salary structure can affect the amount credited each month.
Before comparing two offers
- Separate fixed pay, variable pay, joining bonuses, and benefits.
- Compare annual values for the same period.
- Check whether bonus targets are guaranteed or performance-linked.
- Estimate deductions before comparing take-home pay.
- Consider role, location, working pattern, and non-cash benefits too.