Finance

Tweets on 2010-07-28 — Inflation and Salary Hikes

Can inflation be a reason when justifying a request for a salary hike at work?

I’d say YES. What do you say?

Thanks S, for the discussion leading to this post.

4 thoughts on “Tweets on 2010-07-28 — Inflation and Salary Hikes

  1. The primary purpose of a salary increase is to meet the price rise.

    In government companies, every role (designation) has a pay band with increments for every year (until the maximum in the pay band is reached). This increment is anywhere between 3-8% (usually 6%).

    In private companies, we tie the salary increases with merit which is good. But if the percentage of salary increase is lower than the inflation, then to maintain the same lifestyle, your expenditure will start feeding on your savings.

    My two cents.

  2. Good point.

    But when we talk about salary increases it’s always the before-tax percentages. Factoring in tax implications and inflation, most often we won’t have anything left to talk about.

    What do you think?

  3. I agree with you.

    It is particularly true when you get a salary increase and you move to a higher tax bracket. Thats like feasting your eyes on the menu, not the food :)
    But if your salary increase doesn’t move you up the tax bracket, well, its not so bad. Of course it depends on the percentage of salary increase.

  4. I agree, but two things to note here is How many employers would be ready to give you a salary hike? even if they give you a hike what percentage? 10%, 15% or 30%.. Another thing to remember is as you rise your salary bracket, your tax also goes up..

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