That quick result makes it so HRs, finance teams, and employees across India use such a CTC hike calculator during appraisals, job negotiations, and budgeting.

The Math Behind It (With Formula)

Okay, if you are not satisfied with the calculator and want to do some maths, here’s the formula. Even all salary hike calculators use this formula for hike calculation.

Formula 1: Salary Hike Percentage

Salary Hike % = [(New Salary – Old Salary) ÷ Old Salary] × 100

Example:

• If your old salary = ₹4,00,000
• and new salary = ₹5,20,000

then

• Salary Hike % = (5,20,000 – 4,00,000) ÷ 4,00,000 × 100 = 30%

So you received a 30% hike.

That’s the simplest way to understand how to calculate salary hike percentage manually, though it’s faster with an online tool.

Formula 2: New Salary From Hike %

If you know the salary increment percentage, then the formula becomes:

New Salary = Current Salary × (1 + Hike % ÷ 100)

Example:

• Old Salary = ₹4,00,000
• Hike percentage = 20%

Then New = ₹4,00,000 × (1 + 20/100) = ₹4,80,000.

This is also helpful if you’re trying to see how to calculate a 30% hike on CTC – just plug 30% into the formula.

Formula 3: Real (Inflation-Adjusted) Increment

This one is interesting as well as comprehensive. The formula goes like this:

Real Increment % = [(1 + Nominal Hike %) ÷ (1 + Inflation Rate)] – 1

Let’s say you got a 10% hike, but India’s inflation rate is 1.54% (in September 2025).

Then your real hike = 8.32%.

This insight is what makes a salary increment percentage calculator more valuable for HR analysis and financial planning.

CTC vs In-Hand: Why It Matters

In India, your “salary” is a bundle of components which may include:

• Basic pay
• HRA (House Rent Allowance)
• Medical insurance
• Special allowance
• Variable pay
• PF, tax deductions, etc.

That’s why a CTC hike calculator should go beyond just percentages.

It should show:

• New CTC (total package)
• Revised in-hand salary after deductions
• Breakdown of components before and after the hike

This clarity helps employees understand their raises and helps HR communicate more transparently.

In case you want to know what CTC is and use a CTC calculator, you can jump on our blog, “CTC Calculator: How to Calculate CTC From In-Hand Salary“.

How to Use a Salary Hike Calculator (Step by Step)

Let’s say your current salary is ₹7,00,000. You’ve been offered ₹8,40,000 in a new role.

Go to the salary hike calculator tool.

• Enter ₹7,00,000 as “Current Salary”.
• Enter ₹8,40,000 as “New Salary”.
• Hit “Calculate”.

You’ll instantly get:

• Hike % = 20%
• Hike amount = ₹1,40,000
• New Total CTC = ₹8,40,000

If you want to perform a reverse calculation, simply use the salary hike percentage calculator. Enter your current salary and the percentage increase to see your new pay.

How HRs Use the Salary Increment Calculator

HR professionals love these calculators because they help:

• Plan salary revision budgets for entire departments.
• Compare increment scenarios (e.g., 5%, 10%, 15%).
• Forecast payroll inflation for the year.
• Ensure fairness in employee compensation.

For example, an HR might test multiple hike rates using a salary increment percentage calculator to see how they affect total payroll costs.

A Better Alternative to Salary Hike Calculator

A salary hike calculator takes the confusion out of appraisals and job switches.

But if you are in HR, it’s best to go for HR & Payroll Software for automatic calculation of salary and hikes, ideal budget setting numbers for the department, and so much more.

HRMS is the go-to for almost all leading companies around the globe. Because it helps HR professionals planning increments, or an employee comparing offers, make data-driven decisions. No gut-based guesses but accurate calculations.

If you want to learn more about how NYGGS HRMS can help, book a free one-on-one consultation.

FAQs (With Examples)