Is a 5% Raise Good? What a 5 Percent Raise Really Means
7 min read • June 24, 2026
A 5% raise is generally a good raise, especially if it is above your company's standard annual increase. A 5 percent raise means your pay increases by 5% of your current salary or hourly wage.
For example, if you earn $50,000 per year, a 5% raise would add $2,500 per year, bringing your new salary to $52,500 before taxes.
If you earn $20 an hour, a 5% raise would increase your hourly wage by $1.00, bringing your new rate to $21.00 per hour.
Whether a 5% raise is "good" depends on your current pay, job performance, cost of living, inflation, company budget, and whether the raise comes with more responsibility.
Quick Answer: Is a 5% Raise Good?
Yes, a 5% raise is usually considered a solid raise. It is often better than a small cost-of-living adjustment and can make a noticeable difference over a full year.
A 5% raise may be especially good if:
- You received it without changing jobs
- Your responsibilities stayed mostly the same
- Your company usually gives smaller annual raises
- It comes with better benefits, bonuses, or promotion potential
- It helps your pay keep up with rising expenses
However, a 5% raise may not feel like enough if your workload increased significantly, you are underpaid compared to the market, or your living costs have risen faster than your income.
How to Calculate a 5% Raise
To calculate a 5% raise, multiply your current pay by 0.05.
The formula is:
Current Pay × 0.05 = Raise Amount
Then add the raise amount to your current pay:
Current Pay + Raise Amount = New Pay
For example:
- $50,000 × 0.05 = $2,500
- $50,000 + $2,500 = $52,500
So a 5% raise on a $50,000 salary gives you a new annual salary of $52,500. You can also try the Pay Raise Calculator to do the math instantly.
5% Raise Salary Examples
Here are common salary examples showing what a 5% raise looks like:
| Current Salary | 5% Raise Amount | New Salary |
|---|---|---|
| $30,000 | $1,500 | $31,500 |
| $40,000 | $2,000 | $42,000 |
| $50,000 | $2,500 | $52,500 |
| $60,000 | $3,000 | $63,000 |
| $70,000 | $3,500 | $73,500 |
| $80,000 | $4,000 | $84,000 |
| $100,000 | $5,000 | $105,000 |
The higher your current salary, the more a 5% raise adds in dollar terms.
5% Raise Hourly Wage Examples
A 5% raise can also apply to hourly pay. To calculate it, multiply your hourly rate by 0.05, then add the result to your current hourly wage. Use the Hourly to Salary Calculator to see what your new rate works out to per year.
| Current Hourly Wage | 5% Raise Amount | New Hourly Wage |
|---|---|---|
| $15/hour | $0.75 | $15.75/hour |
| $18/hour | $0.90 | $18.90/hour |
| $20/hour | $1.00 | $21.00/hour |
| $25/hour | $1.25 | $26.25/hour |
| $30/hour | $1.50 | $31.50/hour |
| $35/hour | $1.75 | $36.75/hour |
| $40/hour | $2.00 | $42.00/hour |
For hourly workers, even a small increase per hour can become meaningful over a year.
For example, a raise from $20 an hour to $21 an hour equals an extra $40 per week if you work 40 hours. Over 52 weeks, that adds up to $2,080 more per year before taxes.
How Much Is a 5% Raise Per Paycheck?
A 5% raise affects each paycheck differently depending on your pay schedule. Here is an example using a $50,000 salary:
| Pay Schedule | Before Raise | After 5% Raise | Difference |
|---|---|---|---|
| Annual Pay | $50,000 | $52,500 | $2,500 |
| Monthly Pay | $4,166.67 | $4,375.00 | $208.33 |
| Biweekly Pay | $1,923.08 | $2,019.23 | $96.15 |
| Weekly Pay | $961.54 | $1,009.62 | $48.08 |
These amounts are before taxes and deductions. Your take-home increase will usually be smaller after payroll taxes, benefits, and retirement contributions. To convert in the other direction, try the Salary to Hourly Calculator.
Is a 5% Raise Better Than a Cost-of-Living Raise?
A 5% raise can be better than a basic cost-of-living raise, depending on how much prices have increased and what your employer normally offers.
A cost-of-living raise is designed to help your pay keep up with rising expenses. A merit raise is usually based on performance. A promotion raise is often connected to a new title, more responsibility, or a bigger role.
A 5% raise may be good as an annual performance increase. But if your expenses have risen sharply, the raise may feel smaller in real life.
For example, if your rent, groceries, insurance, and utilities have all increased, a 5% raise may help but may not fully cover the difference.
When a 5% Raise Is a Good Deal
A 5% raise is usually a good deal when it improves your pay without requiring a major increase in workload.
It may be a strong raise if:
- You are staying in the same role
- Your responsibilities are not increasing dramatically
- Your company usually gives smaller raises
- Your pay is already fair for your position
- You also receive benefits, bonuses, or flexible work options
- The raise helps you move closer to your financial goals
A 5% raise can also be a positive sign that your employer values your work and wants to keep you.
When a 5% Raise May Not Be Enough
A 5% raise may not be enough in some situations. It may feel low if:
- You are taking on a much larger workload
- You are being promoted into a higher-level role
- You are paid below market rate
- You have not received a raise in several years
- Your cost of living has increased significantly
- Similar jobs at other companies pay much more
For example, if you are being promoted from an assistant role into a manager role, a 5% raise may not match the added responsibility. In that case, it may be worth researching market salaries and negotiating.
Should You Negotiate a 5% Raise?
You may be able to negotiate a 5% raise, especially if you have strong performance, measurable results, or market data showing that your pay is below average.
Before negotiating, prepare:
- Your recent accomplishments
- Revenue, savings, or results you helped create
- Positive feedback from managers or customers
- New responsibilities you have taken on
- Salary data for similar roles
- A clear pay range or raise request
Instead of saying, "I need more money," focus on the value you bring. For example:
"Thank you for the 5% raise. I appreciate it. Based on my added responsibilities and the results I've contributed this year, I'd like to discuss whether we can revisit the increase or create a plan to move closer to market rate."
This keeps the conversation professional and respectful.
5% Raise vs. 10% Raise
A 5% raise is solid, but a 10% raise is much larger. Here is how they compare:
| Current Salary | 5% Raise | 10% Raise |
|---|---|---|
| $40,000 | $2,000 | $4,000 |
| $50,000 | $2,500 | $5,000 |
| $60,000 | $3,000 | $6,000 |
| $80,000 | $4,000 | $8,000 |
| $100,000 | $5,000 | $10,000 |
A 10% raise is more common with a promotion, job change, major responsibility increase, or strong negotiation. A 5% raise is more common as a performance-based increase or above-average annual raise.
How to Decide If a 5% Raise Is Enough
To decide whether a 5% raise is enough, look beyond the percentage. Ask yourself:
- What is the dollar amount of the raise?
- How much more will I take home each paycheck?
- Did my responsibilities increase?
- Am I being paid fairly compared to similar roles?
- Does the raise help cover higher living costs?
- Are the benefits, schedule, and work environment still worth it?
- Is there room for another raise or promotion soon?
A raise is not only about the percentage. The full picture matters.
What to Do After Getting a 5% Raise
Once you receive a raise, it is a good time to review your budget. You may want to use the extra income to:
- Build an emergency fund
- Pay down debt
- Increase retirement contributions
- Save for a major goal
- Cover higher monthly expenses
- Improve your monthly cash flow
If you do not plan where the extra money will go, it can disappear quickly into everyday spending. Even a modest raise can help if you use it intentionally.
Frequently Asked Questions
Is a 5% raise good?
Yes, a 5% raise is generally considered a good raise, especially if it is higher than your company's normal annual increase and does not come with a major increase in workload.
How much is a 5% raise on $50,000?
A 5% raise on $50,000 is $2,500. Your new salary would be $52,500 before taxes.
How much is a 5% raise on $20 an hour?
A 5% raise on $20 an hour is $1.00 per hour. Your new hourly wage would be $21.00 per hour.
Is a 5% raise better than inflation?
It depends on how much prices have increased during the same period. If your living costs increased by less than 5%, the raise may improve your buying power. If expenses increased by more than 5%, it may not feel like a true gain.
Should I ask for more than a 5% raise?
You may want to ask for more if you are underpaid, taking on a larger role, outperforming expectations, or have market data showing that similar jobs pay more.
What is a good raise percentage?
A good raise percentage depends on your job, industry, company, and performance. A 5% raise is often considered solid, while larger raises may happen with promotions, job changes, or major responsibility increases.
Final Thoughts
A 5% raise is usually a good raise, especially if it is more than your company's standard annual increase and your responsibilities are not changing dramatically.
The real value depends on your current pay. A 5% raise on $50,000 adds $2,500 per year, while a 5% raise on $20 an hour adds $1.00 per hour, or about $2,080 per year for full-time work.
Before deciding whether a raise is enough, look at the dollar amount, your take-home pay, your workload, your local cost of living, and what similar jobs pay.
Use PayRatePro's free Pay Raise Calculator to estimate your new salary, hourly wage, paycheck increase, and annual raise amount before making your next career decision.