Future Salary Calculator
Project your future salary based on your current salary, an expected annual raise percentage, and a number of years. Accounts for compounding annual increases to show real earnings growth over time.
How to use this tool
- Enter current annual salary, expected annual raise and number of years in the fields above.
- Results update instantly as you type — or click Calculate.
- Read your projected future salary and the full breakdown beneath it.
⚠ This tool provides general estimates for education only and is not financial, tax or legal advice. Figures may not reflect your situation — verify with a qualified professional.
Formula
Future Salary = Current Salary × (1 + r)n
Where r is the annual raise rate (as a decimal) and n is the number of years. This is compound growth: each year's raise is applied to the salary after previous raises.
How it works
Salary growth compounds over time because each annual raise is calculated on the new (already-raised) salary, not the original. A 3% raise applied for 5 consecutive years results in more than 15% total growth due to this compounding effect.
This calculator uses the standard compound growth formula identical to compound interest, treating the annual raise percentage as the growth rate. It is suitable for modeling merit raises, cost-of-living adjustments, or a combination of both.
Worked example
Software engineer salary projection
- Current salary: $75,000; Annual raise: 3%; Years: 5
- Apply compound growth formula: $75,000 × (1.03)^5
- (1.03)^5 = 1.03 × 1.03 × 1.03 × 1.03 × 1.03 = 1.159274
- Future Salary = $75,000 × 1.159274 = $86,945.56
Projected salary after 5 years = $86,945.56 (an increase of $11,945.56 or 15.93%)
Common mistakes to avoid
- Entering the raise rate as a whole number (e.g., 3) instead of a percentage decimal when the formula expects a decimal, which compounds at 300% per year instead of 3%.
- Treating the projection as a real (inflation-adjusted) salary when the formula gives a nominal figure: if your 3% raise matches 3% inflation, your purchasing power is unchanged.
- Ignoring variable raise schedules by using a single average rate, which can significantly under- or over-estimate salary if raises accelerate or stagnate over time.
Key terms
- What is compound salary growth?
- Compound salary growth means each annual raise is calculated on the salary as it stands after previous raises, not on the original starting salary. This causes earnings to grow faster than a simple percentage applied once.
- What is the difference between a merit raise and a cost-of-living adjustment (COLA)?
- A merit raise rewards individual performance, while a COLA adjusts salary to keep pace with inflation. Both are typically expressed as annual percentages and can be combined in this calculator.
- How accurate is this projection?
- The projection assumes a constant raise rate every year. In reality, raises vary; this calculator provides a planning estimate, not a guaranteed outcome.
- How do I account for promotions?
- For a promotion, set the raise rate higher in the year of promotion. Alternatively, run the calculator in segments: current salary to promotion year, then restart with the post-promotion salary.
Frequently asked questions
- How do I account for promotions in addition to annual raises?
- Model each distinct period separately: run the calculator for the years until promotion using the current raise rate, then use that projected salary as the new starting salary for the post-promotion period with the updated raise rate.
- Does this calculator account for taxes or benefits?
- No. The formula projects gross salary only. To estimate take-home pay, apply your expected effective tax rate and deduct benefits costs after obtaining the gross future salary.
- What is a realistic long-term annual raise to use?
- Historical US wage growth averages roughly 3-4% per year in nominal terms. Using an inflation rate of 2-3% alongside that suggests real wage growth of 0.5-1.5% annually, which is a conservative planning assumption.