The US Salary Inflation Calculator provides a method to calculate what your annual salary needs to be to keep pace with inflation.
To begin, enter a salary amount in the first box and the result will automatically calculate when you tab or enter out of the box. As a default, a 3.2% annual inflation rate is used for the expected rate. That is simply an average over the years. The expected rate may be changed as well.
How It Works
The US Salary Inflation Calculator is a tool that calculates the needed salary to combat inflation based on an expected inflation rate and initial salary amount. It is a simple percent increase type formula:
(Expected US Inflation Rate) x (Current Salary) + (Current Salary) = Salary to Keep Up to Inflation
The historical table of salaries is a bit more complex in that it uses Consumer Price Index (CPI) data as published monthly by the Bureau of Labor Statistics (BLS). Since the table is based in years, the average CPI for a year is used. Year 2012 is also used as the base since 2013 is still in progress.
Assume $75,000 was entered initially for a person’s Current Salary. Here is how the inflation adjusted salary for 2009 is calculated:
Looking up the CPI tables published by the BLS, the average CPI for 2009 was 214.537 and the average CPI for 2012 was 229.594.
The formula then becomes:
(Current Salary) x (2009 CPI ÷ 2012 CPI) = Adjusted Salary for 2009
Using the actual figures:
$75,000 x (214.537 ÷ 229.594) = $70,081