Give Yourself a Raise (2023)

There's nothing like getting your first real paycheck. You feel a sense of accomplishment, pride and independence. And probably a bit of sticker shock.

While it comes as no surprise that Uncle Sam gets first crack at your hard-earned money, somehow it doesn't quite sink in until you see what's actually left for you to take home. For example, a $3,000 monthly paycheck is whittled down to less than $2,300 after federal, social security and medicare taxes are taken out. That's not counting state taxes and any money you might have withheld from your paycheck for benefits. (See Cost-Of-Living Realtiy Check to learn more.)

The good news: Even if you're too fresh on the job to ask your boss for a raise, there are ways you can squeeze more out of your paycheck. By making a few minor adjustments with your human resources department and taking advantage of programs that help you save for routine expenses, you can boost your disposable income and give yourself a raise.

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Adjust your withholding

Remember all the paperwork you had to fill out your first day on the job? Amid the flurry was a Form W-4 on which you basically told the government how much money to withhold from your paycheck. (Unfortunately, "nothing" is not an option.) How you fill it out could make a big difference in your take-home pay, and how much you give or get from the IRS come next spring. You don't want Uncle Sam to take too much off the top -- that's money you could have used over the months to cover living expenses, savings or investing. And you don't want to pay too little or you'll get stuck with a big tax bill on April 15.

It all comes down to how many "allowances" you claim. The more allowances you claim on your W-4, the less income tax will be withheld. If you claim zero allowances, you will have the most tax taken out.

Most people fill out their W-4 when they first start a job and never think about it again. However, it's never set in stone. You can adjust your withholding (opens in new tab) at any time if you think you're having too much or too little taken out. Say, for example, you buy a house and start paying a huge mortgage interest payment each month. Because you can write off that interest on your tax return and reduce your overall tax bill, you can claim more exemptions on your W-4 to reduce your withholding. Instead of waiting for your refund at tax time, you'll get the cash in your pocket right now to help make ends meet (or have a little fun). A tax refund is simply evidence of poor financial planning.

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To make sure you are having the right amount of money withheld from your paycheck, try our easy withholding calculator (opens in new tab). Just answer three questions (the answers are on your 2005 return), and we'll give you a solid idea of how many more withholding allowances you should be claiming. It's based on the premise that your financial life in 2006 is going to be pretty much the same as in 2005. Ideally, you don't want to owe more than 10% of your total tax bill at tax time, but you should aim for a refund of less than $500.

Cut your taxes, boost your savings

There's no getting around it, you have to pay taxes. But you can reduce the amount of your paycheck that is subjected to them. Taking advantage of employer-sponsored programs that allow you to contribute pre-tax money toward routine expenses -- such as health care, child care or retirement savings -- can help your paycheck go further.

Take the 401(k), for example. These retirement accounts allow you save for your future while reducing your taxable income today.

Say you make $40,000 this year and contribute $2,000 of your salary to your 401(k). Instead of owing taxes on the full $40,000, you're taxed only on $38,000. Your 401(k) contributions are taken off the top before the government dips in. In the 25% tax bracket, that little adjustment saves you about $500 a year in federal taxes. You get the benefit of a $2,000 contribution to your 401(k), but it effectively only cost you $1,500.

Some employers may match a certain portion of your 401(k) contributions, essentially giving you free money to invest in the plan. Take a pass, and it's like passing up a raise. Some jobs allow new hires to join a 401(k) program immediately, while others may require you to wait three months to one year. See Why You'll Love Your 401(k) to learn more about making the most of your 401(k).

Flexible-spending accounts are another great way to lower your taxable income while paying for routine expenses. The most common types are for health care, dependent care and commuting costs -- things you would pay for anyway.

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Health-care flexible spending accounts allow you to set aside pre-tax dollars to pay for medical costs not covered by insurance. You can use the money for expenses such as therapy, orthodontia, contact lenses and even over-the-counter drugs. (See a full list of qualified expenses in IRS Publication 502, Medical and Dental Expenses (opens in new tab).)

Your employer sets the limit of how much you may contribute to your account, typically $2,000 to $3,000 a year. And once you establish your individual contribution level, you cannot change it in the middle of the year unless you have a change in family status -- you get married, have a child or get divorced.

Dependent-care flex accounts work similarly to alleviate the burden of paying for child care while you are at work. The IRS sets a $5,000 household limit on contributions to dependent-care accounts. Knocking five grand off your taxable income saves you $1,633 a year in the 25% tax bracket because the money also avoids social security and medicare taxes.

There is a downside to flexible spending accounts, however. You forfeit any money left in your account at the end of the plan year. You can only sign up for flex accounts, if they are available where you work, when you're first awarded benefits or once per year during your employer's open enrollment period. You can ask your human resources department when you can sign up next, then use our calculator to see how much money you should set aside in a flex account.

Other sources for savings

Even if your employer doesn't offer a 401(k) or a flexible-spending account, you can make the most of your cash by using tax-advantaged plans outside the workplace.

For retirement savings, consider a Roth IRA. You may contribute up to $5,000 after taxes in 2008. Technically a Roth won't stretch your current paycheck, but it'll pay off in the long run because you won't pay taxes on Roth earnings. (See Why You Need a Roth IRA.)

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If you expect to fall in a lower tax bracket when you retire, you can contribute to a traditional IRA. This allows you to deduct your contributions right now and pay the taxes later. But for most young people starting out, a Roth has the best long-term benefits.

For health-care costs, you might benefit from a health savings account. If you have a health insurance policy that requires a minimum deductible of at least $1,100 ($2,200 for families), you can stash enough pre-tax cash in an HSA to cover the deductible. If your employer offers a high-deductible policy, your contributions will be taken directly out of your paycheck just like they would for a flexible spending account. If you've purchased a policy on your own (opens in new tab), though, you'll have fund your HSA with post-tax dollars and deduct your contributions on your tax return.

Money left in an HSA at year-end rolls over for you to use next year. And you typically cannot have both an HSA and a health-care flexible spending account. Learn more about the ins and outs of health savings accounts (opens in new tab).


How much of a raise should I give myself? ›

A good pay raise ranges from 4.5% to 5%, and anything more than that is considered exceptional. Depending on the reasons you cite for a pay raise and the length of time that has passed since your last raise, you could request a raise in the 10% to 20% range.

When should I give myself a raise? ›

Give yourself a raise when your company hits a target or financial goal. This is a great way to stay motivated as a business owner and to hold yourself and the entire company accountable for goal completion.”

How do you present yourself for a raise? ›

Prepare your case and determine what value you bring ahead of time. Rehearse your raise request and get feedback from others before the actual meeting. Schedule a meeting to request a raise at a good time to boost your chance of approval. In the meeting, show confidence, use data, and be specific.

What is a polite way to ask for a raise? ›

Email your manager and explain that you'd like to connect to review your compensation. Outline your impact clearly and concisely. Prepare compelling bullet points that describe exactly how you've excelled in your role. Don't mention what your coworkers make or any personal reasons you might have for needing more money.

Is $1 dollar an hour a good raise? ›

If you get a raise of $1 per hour, whether by getting a promotion or changing jobs, you get that dollar every hour you work. That's why measuring and tracking your earnings with care can add thousands of dollars to your pocket throughout your career. While $1 may not seem like much, it can add up to a lot over time.

What is a 3 raise on $20 an hour? ›

What is a 3% raise of 20? 03*20=0.6, or 60 cents. Adding that to your current wage gives you $20.60. So, with a 3% pay increase, you now make $20.60 per hour.

Is a 25% raise too much to ask for? ›

It's always a good idea to ask for anywhere between 10% to 20% higher than what you're making right now. You may be able to ask for more based on your performance, length of time with the company, and other factors. Make sure you come prepared when you negotiate your raise and be confident.

Is 30% too much to ask for a raise? ›

"30 to 40 percent is a big increase," Herjavec said, adding that most businesses give raises of approximately "8 to 10 percent." "You shouldn't ask for something that big," he added. "Because you're going to shock somebody."

What not to say when asking for a raise? ›

  1. "I Deserve a Raise Because I Have Been Here 'X' Amount of Years." ...
  2. "I Feel That…" ...
  3. "X Is Making More than Me." ...
  4. "I'm Overdue for a Raise." ...
  5. "I Will Leave if I Don't Receive a Raise of X Amount." ...
  6. "I'm Going to Need to Go to the Competition." ...
  7. "I Need More Money Because I'm in Debt."
Jan 27, 2023

Should I quit if I don't get a raise? ›

When you don't get the salary increase you expected, don't panic. Try not to take it personally, take a deep breath, and consider your strategy for moving forward. Don't Quit Right Away. Unless you have another secure job offer waiting for you, it's probably wise to avoid quitting in a huff.

How do I impress my boss for a raise? ›

Get a Raise: 10 Steps for Getting Your Boss to Think You're the...
  1. Take 100% responsibility for the relationship. ...
  2. Have Regular Interaction. ...
  3. Find out what your boss cares about — and do that. ...
  4. Make your accomplishments known. ...
  5. Make your boss look good. ...
  6. Make your boss's life easier. ...
  7. Manage expectations.
Apr 28, 2014

How often should you get a raise? ›

If you recently started a job, wait a minimum of six months to ask for a raise. Most employers are more likely to give you a raise if you have been with the company for at least a year or more. If you have been with the company for multiple years, then you can ask once a year.

How much of a raise should I get after 3 years? ›

Employees who meet their goals and meet the company's expectations are generally entitled to a 3% increase, which is the national average; however, that average could increase between 3 and 4% in 2023. Then there are salary increases that happen when you go above and beyond at work.

How do you ask for a raise when you are underpaid? ›

  1. If you're starting to suspect you're underpaid, do your research. ...
  2. Respectfully request salary information from people in your industry. ...
  3. Consider why you might be making less than a coworker. ...
  4. Prepare a compelling case for why you want more money. ...
  5. Practice making the case to your manager.
Dec 6, 2022

What is $22 an hour annually? ›

$22 hourly is how much per year? If you make $22 per hour, your Yearly salary would be $45,760. This result is obtained by multiplying your base salary by the amount of hours, week, and months you work in a year, assuming you work 40 hours a week. How much tax do I pay if I make $22 per hour?

How much is 20 dollars an hour annually? ›

How much does a $20 An Hour make? As of Mar 7, 2023, the average annual pay for a $20 An Hour in the United States is $40,760 a year.

How much a year is 21 dollars an hour? ›

If you make $21 per hour, your Yearly salary would be $43,680.

How much is a $2000 raise per hour? ›

$2,000 yearly is how much per hour? If you make $2,000 per year, your hourly salary would be $0.96. This result is obtained by multiplying your base salary by the amount of hours, week, and months you work in a year, assuming you work 40 hours a week.

Is a 20% pay raise good? ›

Is a 20% salary increase normal? Generally speaking, a good salary increase when changing jobs is between 10-20%. The national average is around 14.8%, so don't be afraid to ask for a similar increase. At a minimum, you should expect a wage growth of at least 5.8% when you change positions.

What is a good raise for an hourly employee? ›

Companies typically offer employees a 3-5% pay increase on average. Even if this range doesn't seem like a reasonable raise to you, keep in mind that consistent wage increases can add up over time, providing you with a higher income than what you received when you started at the company.

Can you lose a job offer by negotiating salary? ›

It is possible to lose a job offer while negotiating a salary, but Appiah said it only happens in certain contexts. The job offer tends only to be rescinded if the candidate is “negotiating for the sake of negotiating” or the number they are proposing is unreasonable.

Is it rude to ask for a big raise? ›

Remember That Asking for a Raise Isn't Rude or Unusual

Many employees worry that asking for a raise will make them look greedy or rude, but this isn't the case. Asking for a raise is a normal part of having a job, and most employers expect you to ask for a raise occasionally.

Is it bad to ask for a 20% raise? ›

If you are negotiating the salary for a new position or a job at a new company, asking for 10% to 20% more than what you currently make is often the general rule.

Is a 10k raise good? ›

A $10,000 raise is worth much more

A $10k raise now is worth over $500k, HALF A MILLION DOLLARS, in career earnings if you're working for 30 more years. That figure accounts for inflation, but that's it. Earning more now makes it easier to land a higher paying job.

Does it look bad to ask for a raise? ›

The truth is, there's nothing wrong with asking for a raise that reflects the hard work that you do, but there are some approaches and best practices that will always get better results than others.

How much of a raise should I ask for due to inflation? ›

The tricky part is figuring out how much to ask for. The U.S. inflation rate was posted at about 6.4% year-over-year as of January 2023, per the latest CPI data. The obvious solution is to ask for a pay raise of 6.5% or so to at least stay even with inflation, but that's not always the best strategy, experts say.

Can I be fired for asking for a raise? ›

Although there's no law against it, firing employees simply for asking for a raise isn't a good business practice. You want to keep employees who put their best efforts into their job, and are willing to go the extra mile.

Is a $5 dollar raise too much to ask for? ›

Is a $5 dollar raise good? The average pay raise is 3%. A good pay raise ranges from 4.5% to 5%, and anything more than that is considered exceptional. Depending on the reasons you cite for a pay raise and the length of time that has passed since your last raise, you could request a raise in the 10% to 20% range.

How long is too long without a raise? ›

You should work for at least one to two years without a raise. On average, waiting any longer than two years is too long, and working a job for three years without a raise is unacceptable.

What is quiet quitting your job? ›

Key Takeaways. The term “quiet quitting” refers to employees who put no more effort into their jobs than absolutely necessary. A 2022 Gallup survey suggested that at least half of the U.S. workforce consists of quiet quitters.

Is being underpaid a reason to quit? ›

Quitting work because wages were less than the minimum standards set by law will, without exception, constitute good cause for quitting, if the employer refuses to rectify the situation. Both the State of California and the Federal Government have minimum wage statutes.

Do bosses give raises without asking? ›

The moment your boss offers you a raise, and you didn't have to ask for it! It doesn't happen often unless you have something in your contract that stipulates your pay increases, or some other sort of mandated pay raise. However, for the majority, an impromptu raise is just a dream.

How do you prove you deserve a pay raise? ›

Once you have a clearer idea of your value, it's time to look at the specifics. Being able to explain exactly why you think you're worth more is essential in convincing management to give you that pay raise.
  1. Training and qualifications. ...
  2. Technical skills. ...
  3. Job milestones. ...
  4. New innovations.

What are good reasons to ask for a raise? ›

Good reasons to ask for a raise include:
  • You've significantly increased your industry knowledge.
  • You've taken on additional responsibilities.
  • You've successfully completed a major project that helped the company.
  • Your employer has strong quarterly earnings.
  • You received a job offer from another company that pays better.
Dec 6, 2022

How to get a raise without a promotion? ›

Even if you're not offered a raise with your promotion, you do have the option to ask for one, inquire about other benefits, negotiate a pay increase, or ask for a salary review at a later day. Before you decide what to do, take the time to research what similar jobs pay so you can make an informed decision.

How much should I ask for an hourly raise? ›

How much to ask for (hourly or salary) A raise of 10-20% is considered reasonable both for hourly and salary employees. This is the top end of what you should ask for. (And the truth is, you're more likely to get a 20% increase when changing jobs completely.

Am I entitled to a pay rise every year? ›

A good rule of thumb is to ask no more than once a year and no sooner than six months after joining the company. You might be wondering if it is the law that you should get a pay rise every year. It isn't. You can discuss the possibility of an increase, but your employer is under no obligation to offer one.

Can I ask for a raise every year? ›

In most cases, you shouldn't ask for a raise more than once a year. Of course, there are exceptions to this rule, such as if your employer didn't give you a raise six months ago but promised to revisit the issue in another four months based on performance goals or available funding.

Why do new hires get paid more? ›

Wage compression can occur when a company has a history of infrequent raises or salary increases. It may also occur if a change in leadership, structure or market calls for the company to entice new talent by using higher wages or higher total compensation packages.

How long should you stay at a job? ›

Experts tend to agree that you should stick with your current job for at least two years. The Bureau of Labor Statistics reported that as of January 2020, the median number of years that both wage and salary workers stay at their jobs is 4.1 years.

What is the average salary increase for 2023? ›

Some other surveys, however, show employer pay increases set to pick up this year. A fall survey by research firm WTW had average estimated salary increases rising to 4.6% in 2023 from actual pay rises of 4.2% last year.

What to do when you find out you make less than your coworkers? ›

Many reasons exist for why you might make less than your co-workers, so do not immediately assume it is discrimination. Find the reason, then arrange a meeting with your manager to negotiate a higher salary. Companies should account for pay disparities through regular compensation monitoring.

What to do if your job doesn't pay enough? ›

What to Do If Your Job Doesn't Pay You Enough Money
  1. Ask for a Raise — and Don't Relent.
  2. Begin to Look for Other Opportunities.
  3. Negotiate from the Very Beginning at Your Next Job.
  4. Earn Extra Income.
Sep 22, 2022

What to do if you are not being paid fairly? ›

Employees who believe that they have not been compensated fairly for their work can file complaints with the Department of Labor's (DOL) Wage and Hour Division.

Is asking for a 25% raise too much? ›

It's always a good idea to ask for anywhere between 10% to 20% higher than what you're making right now. You may be able to ask for more based on your performance, length of time with the company, and other factors. Make sure you come prepared when you negotiate your raise and be confident.

Is a 30% raise too much to ask for? ›

"30 to 40 percent is a big increase," Herjavec said, adding that most businesses give raises of approximately "8 to 10 percent." "You shouldn't ask for something that big," he added. "Because you're going to shock somebody."

Is it okay to ask for a 25% raise? ›

Ask for 15- 25% If...

You're paid competitively in your role but you have been an outstanding contributor. You might also ask for a raise between 15% and 25% if your role has taken on more responsibility but your job title didn't change.

Is a 30% raise a lot? ›

30% is staggeringly high. It makes me wonder about your original pay. In most cases, 4–5% is the average employee raise. 10% is considered high.

Can asking for a raise backfire? ›

For a long time, people believed they had to have another offer to get a raise at their current job, Frank says. But that can backfire. Your manager may call your bluff and you'll need to change jobs. Or even if your employer does offer a counter and you stay, there may be some broken trust issues.

Is it awkward to ask for a raise? ›

First, know that it's normal to ask.

As nervous as you might feel about asking for a raise, remember that it's a much less big deal for your boss. She deals with salaries all the time, and the subject isn't going to feel nearly as weighty or fraught to her as it does to you.

What should my salary be at 25? ›

In this post are United States Salary Brackets by Age for 2022.
What is the median salary by age in the United States?
AgeMedian Salary
51 more rows

What is a good wage at 30? ›

22-29: £26,096 pa. 30-39: £32,965 pa. 40-49: £35,904 pa. 50-59: £33,231 pa.

What should my salary be at 30? ›

The answer to this question depends on several factors, including the individual's industry, location, experience, and education. However, in general, a good salary range for a 30-year-old would typically be between $50,000 to $100,000 per year.

What salary increase is worth switching jobs? ›

Generally speaking, a good and reasonable salary increase when changing jobs is between 10-20%. The national average is around 14.8%, so don't be afraid to ask for a similar increase. At a minimum, you should expect a wage growth of at least 5.8% when you change positions.


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