How to Calculate a Salary Raise

How do you know if you deserve a raise?

You need to critically evaluate yourself. Firstly, you need to determine the exact number of years you have worked for your employer. You also need to note when you received your last salary raise. 

Second, evaluate your effort. In other words, your contribution to the overall success of the company. For instance, if you exceeded your sales targets and raked in a lot of dollars in sales, you are probably justified to ask for an increase.

If, however, you have underperformed, you need to evaluate your position accordingly. Also, you need to take into account the general state of your employment – has the company been doing well? Or has it been suffering during the financial crisis? In other words, can your employer actually even afford to give you a raise?

How to calculate a Salary Raise

In most companies salary increases range between 5 to 15 percent.

For instance, if your monthly salary is USD2 300 and your are looking for a 15 percent raise, then multiply USD 2 300 by 0.15 and you will get 345.00.

Thus, the 15% rise in your monthly salary will be equivalent to USD345.00. Therefore the total amount you will be asking for is USD 2 300 + USD 345.00 and your new pay will be USD2 645.00.

Comparison

Before you table your salary request you need to compare it with the current inflation rate, as you want to determine if the increase will make any realistic change to your buying power.

In other words, your demand should always be higher than the rate of inflation.

Justify it

You can only enter negotiations with your employer for a salary increase if you are prepared to justify it.

How do you justify it?

You need to bring to the employer’s attention your length of service, and individual contribution to the overall success of the business.

You must also be prepared to accept a lower rate of adjustment, as your employer will also counter your proposal.

If you remain inflexible, you may find yourself out of a job sooner rather than later.

Finally, knowing how to calculate salary increase is beneficial to the employee but you must remember these two cardinal rules:

• Salary arrived at, should not chip below the candidate's actual worth
• Salary asked for, should not rise above what the company can afford

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Find out more about Labour Laws in Zimbabwe.