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Real Wage Growth Calculator

Work out real wage growth instantly with clear inputs, formula shown and shareable results.

About Real Wage Growth Calculator

Real wage growth is nominal growth deflated by inflation, calculated as a ratio rather than a subtraction. The inflation-adjusted salary figure shows exactly what you would need to be earning to have stood still, which is the most useful comparison at review time.

Formulas

Real growth

Real = (1 + Nominal growth) / (1 + Inflation) - 1

Inflation-adjusted salary

Adjusted = Previous salary x (1 + Inflation)

Worked example

With the default values below, Real Wage Growth Calculator returns Real wage growth of 1.69%. Change any input above and every figure here is recalculated in your browser.

Inputs used

Previous salary
1,100,000
Current salary
1,188,000
Inflation over the period
6.2
Period covered
12

Results

Real wage growth
1.69%
Nominal wage growth
8.00%
Annualised real growth
1.69%
Salary needed just to keep pace
$1,168,200.00

Step by step

  1. 1Values used
  2. 2Real growth
  3. 3Inflation-adjusted salary
  4. 4Real wage growth= 1.69
  5. 5Nominal wage growth= 8.00
  6. 6Annualised real growth= 1.69
  7. 7Salary needed just to keep pace= 1,168,200.00

Assumptions and limits

  • The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take tax or fees or charges into account.
  • Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

Is nominal minus inflation good enough?

It is a reasonable approximation below about 5% but drifts as rates rise. The ratio form is always correct.

Which inflation measure should I use?

Headline consumer inflation for your country, or a city-specific index if available, since housing costs dominate personal inflation.

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