Real wage calculator

This real wage calculator shows what a change in pay is really worth once inflation is taken out. You enter your current gross wage, the nominal change as a percentage and an inflation rate you choose; it returns the real change both as a percentage (the exact Fisher relationship) and as an exact amount of money for the same period. This is a simplified model based on the rates you enter yourself — no live inflation data and no tax. Everything runs in your browser; nothing is stored or sent anywhere.

This calculator needs JavaScript because the calculation runs entirely in your browser – so your inputs never leave your device. Two fully worked examples are shown further down this page.

What your result means

The headline figure is the real change in your wage as a percentage — the part of the nominal change that survives the loss in the value of money. Positive means your purchasing power grows; negative means it falls despite any nominal rise. The cards below show the nominal change in money, the new gross wage, the new wage in today's purchasing power and the real change in money — all for the same period as your input and with no tax taken off.

How this calculator works

The calculator compares your pay before and after the change. The nominal change as an amount is gross wage × nominal percentage / 100; added to the old wage it gives the new nominal gross wage. A negative percentage is a cut (at most −100%).

The real change uses the exact Fisher relationship: real % = ((1 + g/100) / (1 + p/100) − 1) × 100, where g is the nominal change and p the inflation rate you assume. This is deliberately not the common 'nominal minus inflation' approximation, which ignores how the two factors interact and overstates the real wage at higher rates. The new wage in today's purchasing power is the new nominal wage divided by (1 + p/100); the real change in money is that figure minus the old wage.

The gross wage you enter can be a monthly or a yearly figure — the result is for that same period and currency. The calculator is gross only: no tax, no social contributions, no gross-to-net conversion. The inflation rate is always your own assumption; no current price indices are fetched. Internally the calculation is unrounded and only rounded for display.

Formula and variables

nominal change (money) = B × g / 100new gross wage = B + nominal change (money)real change (%) = ((1 + g/100) / (1 + p/100) − 1) × 100 (exact Fisher relationship)new wage in real terms = new gross wage / (1 + p/100)real change (money) = new wage in real terms − B

g: nominal wage change in per cent (e.g. 4 for +4%, −3 for a cut)
p: assumed inflation rate in per cent (your input or an example assumption)
B: current gross wage for the period you pick (monthly or yearly), in the chosen currency

Worked examples

Example 1: a 4% rise with 3% inflation (yearly figure)

Example inputs
Current gross wage per year (example assumption)	€42,000.00
Nominal wage change	+4%
Assumed inflation rate	3% (example assumption)

Example results
Nominal change	€1,680.00
New gross wage (nominal)	€43,680.00
Real change	+0.97%
New wage in real terms (today's purchasing power)	€42,407.77
Real change in money	€407.77

The nominal rise is €42,000.00 × 4% = €1,680.00, so the new gross wage is €43,680.00 per year. The real change uses the exact Fisher relationship: (1 + 0.04) / (1 + 0.03) − 1 ≈ +0.97% — not the '4% − 3% = 1%' shortcut. In today's purchasing power €43,680.00 / 1.03 ≈ €42,407.77, about €407.77 more than the current wage. The rates are example assumptions; tax and social contributions are not included.

Example 2: a 5% rise with 2% inflation (monthly figure)

Example inputs
Current gross wage per month (example assumption)	€3,500.00
Nominal wage change	+5%
Assumed inflation rate	2% (example assumption)

Example results
Nominal change	€175.00
New gross wage (nominal)	€3,675.00
Real change	+2.94%
New wage in real terms (today's purchasing power)	€3,602.94
Real change in money	€102.94

At €3,500.00 per month a +5% rise adds €175.00, giving €3,675.00. With assumed inflation of 2% the real change is (1 + 0.05) / (1 + 0.02) − 1 ≈ +2.94%. In today's purchasing power the new wage is €3,675.00 / 1.02 ≈ €3,602.94, about €102.94 more than today. All percentages are example assumptions; the calculation is gross and before tax.

Assumptions

The gross wage you enter is for a period of your choice (monthly or yearly); the result is for that same period and currency.
The nominal change and the inflation rate are your own inputs or marked example assumptions — not researched or current values.
The real change is computed with the exact Fisher relationship, not the nominal-minus-inflation approximation.

Limitations of this calculator

Gross only: no gross-to-net calculation, no tax class, no tax progression and no social contributions.
No live inflation data and no statement about current inflation — you enter the rate yourself.
A single point-in-time comparison (old versus new wage), not a multi-year projection.
Separate from the inflation / purchasing-power calculator (C04) and from the real investment return calculator (C05): this one is only about the real wage.

Common misconceptions

Using 'raise minus inflation': That rule of thumb only approximates the real change; it ignores how the pay factor and the inflation factor combine and overstates the result, more so at higher rates.
Reading the figure as net pay: The calculator is gross only. It applies no tax, no tax class and no social contributions, so the real take-home effect can differ.
Expecting live inflation: There is no live CPI feed and no claim about current inflation — you type the rate yourself.
Confusing it with other tools: This is about wages, not the general purchasing power of a sum of money and not the real return on an investment.

Frequently asked questions

What is the difference between a nominal and a real wage change?

The nominal change is the percentage or amount on your payslip. The real change is what is left after the fall in the value of money. If pay rises 4% while prices rise 3%, the real change is roughly +1% — your purchasing power grows only a little.

Why not just do 'raise minus inflation'?

That is an approximation. It ignores that the pay factor and the inflation factor combine multiplicatively. At low rates the error is tiny; at higher rates it becomes noticeable. The exact Fisher relationship divides the factors and gives the correct figure.

Is the result gross or net?

Gross. The calculator applies no tax, no tax class and no social contributions. Your net outcome depends on your personal situation and is out of scope here.

Where does the inflation rate come from?

From you. There is no live CPI feed and no claim about current inflation. For an official figure, see your national statistics office; you then enter a rate you find reasonable.

Can the real change be negative even though my pay went up?

Yes. If inflation is higher than your nominal rise, your purchasing power falls and the real change is negative, even though the number on the payslip went up.

Sources and further reading

Official and independent sources on this topic. The links open each website in a new tab; no content is loaded from them into this page.

Real average weekly earningsU.S. Bureau of Labor StatisticsOfficial method for deflating nominal earnings into real (inflation-adjusted) earnings — the basis for turning a nominal wage change into a real one. No live data in the calculator.
Inflation and consumer prices (HICP)EurostatOfficial consumer-price inflation as a reference for the rate you enter yourself; the calculator fetches no current values.

Spotted an error in the calculation or the text?

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Last reviewed: 12/09/2026 · All calculations run in your browser – inputs are not stored. ·How we check our calculators