Graduate Salary Expectation Calculator

What the curve looks like

A 30,000 starting salary growing at 4% a year reaches 44,407.33 by year 10, 65,733.69 by year 20, 97,301.93 by year 30 and 144,030.62 by year 40. Across a 40-year career that sums to 2,850,765.47, an average of 71,269.14 a year. The career average is more than twice the starting figure, and that gap is what the exercise exists to show.

The constant-rate assumption

One rate applied for forty years is a strong simplification, and it is the assumption doing all the work here. A fixed percentage produces a smooth exponential, and nothing about a career obliges it to follow one. The profile is not a fixed feature of the world either: work on age-earnings profiles finds that the profile for male workers is significantly influenced by the age composition of the workforce, and that it twisted against younger workers when their numbers rose sharply, with the effect especially marked among college graduates. A rate drawn from one cohort's experience is not automatically the rate for the next.

Where the rate matters is the long run. At 4% the year-40 salary is 4.8 times the starting figure. Drop the rate to 3% and it is 3.3 times; raise it to 5% and it is 7.0 times. The same forty years, three assumptions, three different careers.

Where the starting figure comes from

Starting salaries are not comparable across borders, and the growth rate is not either. Wage levels, wage growth and wage inequality all differ by country, which is what the ILO's Global Wage Report series examines. A figure taken from one country's graduate market says little about another's, so the number to enter is one drawn from the market being entered.

Which input moves the answer

Three inputs and only two of them touch the headline. A 1% rise in the starting salary lifts the year-10 figure by exactly 1%, because the salary is a straight multiplier. A 1% rise in the growth rate lifts it by 0.39%. Career length does not enter the headline figure at all: it feeds the lifetime and average rows, and changing it leaves the year-10 salary untouched.

What the projection leaves out

• Tax, pension contributions and anything else deducted before the money arrives
• Inflation, so every figure is in future money rather than present purchasing power
• Career breaks, part-time periods and changes of field
• Step changes, since promotions and job moves arrive as jumps rather than as a smooth annual rate
• Bonuses, equity, overtime and everything paid that is not base salary
• Any flattening or decline in the late career, which a constant rate cannot represent

For educational illustration only

This calculator raises one growth rate to a power and sums the series. Both the starting salary and the rate are assumptions supplied by the person using it, and the output is only as good as they are. It shows the shape of compounding across a career rather than what any career will pay.