The following formula is used to calculate a pay raise:
\[ \text{NP} = \text{OP} \times \left( \frac{I}{100} + 1 \right) \]
Where:
A pay raise is an increase in salary or wages received by an employee from their employer. It is important because it rewards employees for their hard work, dedication, and contributions to the company. A pay raise also helps to motivate and retain talented employees, boosting morale and job satisfaction. Additionally, it can help employees keep up with inflation and improve their financial well-being.
If an employee has an original pay rate (OP) of $20.00 per hour and receives a percentage increase (I) of 5%, the new pay rate (NP) would be calculated as follows:
\[ \text{NP} = 20 \times \left( \frac{5}{100} + 1 \right) = 20 \times 1.05 = 21 \]
Therefore, the new pay rate (NP) would be $21.00 per hour.
