Salary vs Inflation Calculator
Is your salary growth actually beating inflation? Find out if you're winning or losing the purchasing power game.
🎯
Losing
to Inflation
Warning! Inflation is winning. Your purchasing power has decreased.
Real Growth
-12.5%
Purchasing Power Lost
-Rs.75,000
Required Salary
Rs.8.75 L
Gap Amount
Rs.75,000
Real Growth Rate
-50%
0%
+50%
-12.5%
Inflation-Adjusted Growth
Your Salary Aged Like...
🥛 Milk
Years of Work Inflation Ate
0.8 years
Nominal Growth
+60%
Cumulative Inflation
+82%
Avg. Inflation/Year
6.2%/yr
Your Avg. Hike/Year
9.8%/yr
Your Salary vs Inflation-Adjusted Salary
Year-wise: Your Hike vs Inflation
Purchasing Power of Rs.1 Lakh Over Time
What Prices Looked Like Then vs Now
How to Use the Salary vs Inflation Calculator
- Enter Starting Salary: Input your annual salary when you started your job or from a reference point you want to compare.
- Enter Current Salary: Input your current annual salary to see how much you've grown.
- Select Years Worked: Choose how many years have passed since your starting salary.
- Pick Starting Year: Select the year you started to use actual historical inflation data for India.
- Use Presets: Quickly switch between 3, 5, 10, or 15-year comparisons to see different timeframes.
- Analyze Results: See your real growth rate, purchasing power change, and whether you're winning or losing against inflation.
Understanding Salary vs Inflation in India
Many people focus on their nominal salary increase without considering inflation. A 10% raise sounds great, but if inflation was 7%, your real raise was only about 3%. This calculator helps you understand the true picture.
What is Real Salary Growth?
Real salary growth measures your purchasing power increase after accounting for inflation. The formula is:
Real Growth = ((1 + Nominal Growth) / (1 + Inflation)) - 1
For example, if your salary grew from Rs.5L to Rs.8L over 5 years (60% nominal growth) but inflation was 40% cumulative, your real growth is only about 14%.
Why Does This Matter?
- Lifestyle Maintenance: If your real growth is negative, you're actually getting poorer despite salary hikes
- Negotiation Power: Use this data when negotiating raises - show you need X% just to maintain purchasing power
- Career Decisions: Compare opportunities considering inflation, not just nominal salary
- Long-term Planning: Understand how much you need for retirement after inflation
India's Inflation Reality
India has experienced varying inflation rates over the years:
- 2008-2014: High inflation period (8-12% annual)
- 2015-2019: Moderate inflation (3-5% annual)
- 2020-2023: COVID impact and recovery (5-7% annual)
Over a 10-year period, cumulative inflation in India typically ranges from 50-80%, meaning your salary needs to nearly double just to maintain the same purchasing power.
Industry Benchmarks for Salary Growth
- IT/Tech: 8-15% average annual hikes
- Finance/Banking: 7-12% average annual hikes
- Manufacturing: 5-8% average annual hikes
- Government: 3-5% average annual hikes (but with DA adjustments)
Frequently Asked Questions
How do I calculate if my salary is beating inflation?
Compare your nominal salary growth percentage against cumulative inflation over the same period. If your salary grew 50% but inflation was 40%, your real growth is about 7% (not 10%). Use this calculator for accurate results based on actual Indian inflation data.
What is a good salary hike percentage in India?
In India, inflation averages 5-7% annually. A 'real' raise needs to exceed this. Industry averages: IT (8-12%), Finance (7-10%), Manufacturing (5-8%). A 10% hike with 6% inflation gives only 4% real growth. Aim for at least 3-5% real growth annually.
How much has inflation been in India over the last 10 years?
India's cumulative inflation from 2014-2024 was approximately 55-65%, meaning prices roughly increased by 55-65%. To maintain the same purchasing power, your salary needed to increase by the same percentage. This calculator uses actual year-by-year CPI data.
My salary doubled in 10 years. Am I doing well?
It depends! A 100% increase (doubling) over 10 years sounds impressive, but if cumulative inflation was 60%, your real growth is only about 25% over the decade. That's roughly 2.3% real growth per year - decent but not exceptional. Use this calculator to see your exact numbers.
Should I use CPI or WPI for salary comparisons?
Use CPI (Consumer Price Index) for personal finance decisions. CPI measures the price change of goods and services that households typically consume. WPI (Wholesale Price Index) is more relevant for businesses. This calculator uses CPI-based inflation data.
How can I beat inflation with my salary?
Strategies include: (1) Negotiate annual raises above inflation rate (2) Switch jobs strategically - job hoppers often get 20-40% hikes (3) Build skills that command premium salaries (4) Seek promotions that come with significant raises (5) Consider higher-paying industries or locations.
Why does it feel like prices have increased more than official inflation?
Personal inflation varies based on spending patterns. Education, healthcare, and housing costs have risen faster than overall CPI. If these are major expenses for you, your personal inflation rate may be higher than the national average. The 'purchasing power examples' in our results show specific item price changes.