Bonus vs Raise Calculator

About this calculator

Employers sometimes offer a choice — or an implicit trade-off — between a one-time cash bonus and a smaller but permanent salary raise, and the better deal depends entirely on the time horizon. This calculator projects the cumulative value of each path over a number of years: the bonus paid once at the start versus the raise compounding as a recurring addition to every future paycheck (and often as a higher base for future raises too).

A bonus feels bigger in year one, but a raise's advantage compounds — it typically becomes the new baseline for merit increases and often for bonus and benefit calculations tied to base salary. Employees use this comparison to evaluate a compensation offer with real numbers instead of gut feeling, especially when negotiating between the two options directly.