Did your raise beat inflation?

The real raise formula

Your real raise is the change in what your pay can buy. Take 1 plus your raise, divide by 1 plus inflation over the same period, and subtract 1. Inflation here is the Consumer Price Index for All Urban Consumers (CPI-U), the government's headline measure of prices. In the 12 months through September 2026 it rose 3.7%:

Real raise = (1 + raise) / (1 + inflation) - 1, with CPI-U inflation of 3.74% over the 12 months through September 2026.

For everyday raises the shortcut is off by only a few hundredths of a point, but the gap grows with the numbers: a 10% raise is worth 6.04%, not 6.26%. In the 12 months through June 2022, when inflation peaked at 9.1%, a 5% raise was really a cut of 3.72%.

The raise you need to catch up since 2020

If your pay has stood still, or your raises trailed prices, the raise that restores your old buying power is the total rise in CPI-U since then. Measured to September 2026, the latest month the Bureau of Labor Statistics has published:

CPI-U, not seasonally adjusted, the series BLS's own inflation calculator uses. The last column carries $60,000 forward to September 2026.

Take someone earning $60,000 in January 2020. To buy the same things in September 2026, they need about $78,367, $18,367 more. Steady 3% raises every January from 2021 through 2026 (6 raises) would have brought them to $71,643, still $6,724 short, because prices rose an average of 4.1% a year over the period. Someone whose pay was last set September 2025 needs 3.7% just to stand still.

What a raise is worth after tax

Take-home pay grows a little more slowly than gross pay, because each extra dollar is taxed at your top rate, not your average rate. For a single filer earning $60,000, federal income tax plus Social Security and Medicare take about 16% of the whole salary but about 20% of each added dollar. Under 2026 rules:

2026 federal income tax with the standard deduction, plus 6.2% Social Security and 1.45% Medicare; single filer with wages only, before any state or local income tax. "After inflation" adjusts the take-home change for 3.74% CPI-U inflation.

With the 2026 tax rules held fixed, a raise that exactly matches inflation lifts take-home pay 3.59%, leaving it 0.15% behind prices; a 3% raise leaves it 0.84% behind. That fixed-rules view overstates the drag. Each year the IRS raises the tax brackets and the standard deduction for inflation, so a raise that keeps pace with prices mostly stays in the same place in the brackets. The adjustment uses the chained CPI (C-CPI-U), which usually rises a little more slowly than CPI-U, so a small drag remains. Our tax engine covers 2026 only, so this table is an approximation of the year-to-year change, not a comparison of two actual tax years.

To see a salary as weekly, biweekly and hourly pay with your state's tax, use the salary calculator; the paycheck calculator shows one check in detail, and the 2026 tax brackets guide explains the bracket math.

CPI-U, CPI-W and your own inflation rate

CPI-U tracks prices paid by urban consumers, a group BLS says makes up over 90% of the U.S. population; it is the figure in the news and in this guide. CPI-W covers households that get most of their income from hourly wage and clerical jobs, about 30% of the population, and is the index Social Security uses. The two usually move closely together, but they can differ by a few tenths of a point in a given year.

Neither is your personal inflation rate, which depends on what you buy. Since January 2020, prices in the main CPI categories have moved very differently:

CPI-U category indexes, U.S. city average, not seasonally adjusted, January 2020 to September 2026.

Energy rose 60.3% while apparel rose 15.9%. A household that spends more than average on the faster-rising categories, such as a renter whose lease reset or a long-distance commuter, has seen more inflation than the headline; someone with a fixed-rate mortgage, whose housing payment has not changed, has likely seen less. The inflation calculator's category view runs the same comparison for any dates.

Other yardsticks: the Social Security COLA and the Employment Cost Index

• Social Security cost-of-living adjustment (COLA). Each October, the Social Security Administration compares the average CPI-W for July through September with the same months of the last year a COLA took effect, and raises benefits by that percentage starting with January's payments. The current figure and the full history are on SSA's COLA page.
• Employment Cost Index (ECI). BLS's quarterly measure of what employers pay, including a wages and salaries series for private industry and government workers. Its 12-month change shows what a typical raise has been, so you can compare your own raise against other workers as well as against prices. BLS publishes it about a month after each quarter ends.

Neither replaces your own numbers: the COLA follows a different index and a different window, and the ECI is an average across jobs.

Using the numbers in a pay conversation

Inflation figures are public and easy to check, which makes them useful facts to bring to a review. State the period since your pay was last set, the CPI-U change over that period, and the salary that would match it, as in the table above. Pair that with what the role pays in the market and what you have taken on since then. Employers set pay on many factors, and they are not required to match inflation, but a clear figure such as "$60,000 in January 2020 is about $78,367 today" makes the conversation concrete. Benefits count too: a larger 401(k) match or lower health premiums add to what a job is worth, and the salary calculator's compare view can weigh two offers side by side.