Nominal pay and real pay
Nominal salary is the amount printed on the payslip. Real salary adjusts that amount for changing prices so you can compare purchasing power across time.
Use cumulative inflation
The inflation input must cover the same period as the two salary values. For several years, compound annual inflation rates instead of simply adding them.
Choose the right data
Consumer price indexes are published for specific places, baskets, and periods. Select an official series that matches where and when you spend, then enter its cumulative change.
A $65,000 salary after 6% inflation
A $60,000 salary needs to become $63,600 to keep pace with 6% inflation. A current salary of $65,000 is $1,400 above break-even, a real gain of about 2.20%.
$60,000 × 1.06 = $63,600; $65,000 - $63,600 = $1,400Common mistakes to avoid
Frequently asked questions
What raise keeps pace with inflation?
Over one period, salary must rise by the same cumulative percentage as prices to preserve the same purchasing power.
Does this tool fetch official inflation data?
No. The MVP accepts a manual cumulative rate so the source and period remain under your control.
Can the result be negative?
Yes. A negative difference means current salary is below the inflation-adjusted break-even salary.