Bonus vs Salary Increase Calculator
Compare a one-off bonus to a permanent raise.
Compare the lifetime value of a one-off bonus against a permanent salary increase over a set horizon. Enter alternative annual raise to see which wins.
What this tool does
Enter your bonus amount, the alternative salary increase, and how many years you expect to stay in the role. The tool totals both cash streams and shows which wins.
Enter Values
Formula Used
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Disclaimer
Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.
A one-off bonus is simple: you get the cash once. A salary increase keeps paying every year you stay. The maths tips toward the raise once your horizon gets long enough. Example: a 5,000 bonus beats a 1,000/year raise in year one, but after five years the raise has paid 5,000 and kept going.
How to use it
Enter the bonus on the table, the salary bump being offered instead, and the number of years you expect to stay. The tool compares total cash received.
Decision comparator.
Quick example
With one-off bonus of 5,000 and alternative annual raise of 1,500 (plus years in role of 5), the result is 2,500.00. Change any figure and watch the output shift — it's often more useful to see the pattern than to memorise the formula.
Which inputs matter most
You enter One-off Bonus, Alternative Annual Raise, and Years in Role. Two inputs usually tip the answer one way or the other. Identify which ones matter most by flipping each value past a round threshold and watching whether the winning option changes.
What's happening under the hood
Sum the raise across the horizon and compare to the bonus. Ignores tax and investment of the bonus — both affect outcome but depend on personal circumstances. The formula is listed in full below. If the number looks off, you can retrace the calculation by hand — that's the point of showing the working.
Using this in pay negotiations
Knowing the exact figure behind a headline rate gives you specific numbers to anchor to in conversations about pay. "The difference is £X per month after tax" lands harder than "a couple of grand a year". Concrete numbers move decisions.
What this doesn't capture
Tax bands, pension contributions, student-loan deductions, and benefits-in-kind sit outside this calculation. The figure is the headline; your actual position depends on local tax rules and personal circumstances. Pair with a dedicated take-home calculator for the full picture.
Bonus vs raise produces a winner based on the inputs provided.
Inputs
This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.
Sources & Methodology
Methodology
Sum the raise across the horizon and compare to the bonus. Ignores tax and investment of the bonus — both affect outcome but depend on personal circumstances.
References
Frequently Asked Questions
What about investing the bonus?
Does tax change the answer?
What if I might leave early?
Does the raise compound?
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