Work out pay rise needed to beat inflation instantly with clear inputs, formula shown and shareable results.
Matching inflation only holds purchasing power still. To gain in real terms the rise must compound the inflation rate with the target real gain, not simply add them. The after-tax value of the rise is what actually reaches your bank account, and at a high marginal rate that is a good deal less than the headline increase.
Required rise
Required % = [(1 + Inflation) x (1 + Target real gain) - 1] x 100
After-tax value
After-tax rise = Gross rise x (1 - Marginal tax rate %)
Because the real gain applies to money that has already been uprated for inflation. At 6.5% inflation and a 2% real target the compounded figure is 8.6%, not 8.5%.
Not with a flat marginal rate, since salary and prices are in the same units. It does change how much of the rise you keep, which is why the after-tax figure is shown.