The formulas
New salary = current salary × (1 + hike% ÷ 100)
Hike % = (new salary − current salary) ÷ current salary × 100
A 12% hike on ₹8,00,000 a year is ₹96,000, so the new salary is ₹8,96,000, or ₹8,000 more each month before tax. Going from ₹8 LPA to a ₹10 LPA offer is a 25% hike.
Compare offers on the same basis
- Fixed pay vs CTC: a hike on CTC can hide a bigger variable or bonus share that may not be paid in full. Compare the fixed part on both sides.
- In-hand: PF, professional tax and income tax come out before your bank sees it. Check the take-home of both packages with the in-hand salary calculator.
- Joining bonus and ESOPs are one-time or uncertain. Leave them out of the hike percentage and weigh them separately.
Real hike after inflation
If prices rose 5% over the year, a 7% hike leaves you only about 1.9% better off in what your salary can buy: (1.07 ÷ 1.05) − 1. Anything below the inflation rate is a pay cut in real terms.
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Questions people ask
How do I calculate my salary hike percentage?
Subtract your current salary from the new one, divide by the current salary and multiply by 100. ₹50,000 to ₹56,000 a month is (6,000 ÷ 50,000) × 100 = 12%.
Is a 10% hike good?
Annual increments in India have mostly been in the high single digits in recent years, so 10% is above average for staying in the same job. Job switches usually bring 20–40%.
How much will a hike increase my in-hand salary?
Less than the hike on CTC, because PF rises with basic pay and part of the increase may be taxed at a higher slab. Run both salaries through the in-hand salary calculator to see the exact difference.