How to tell if your pay rise is a real one

Earning more does not always mean buying more. How to compare your pay rise with inflation, using official data.

Nominal pay rise and real pay rise

Your nominal pay rise is what your payslip says: how much more you earn. The real one is what matters: how much more you can buy. If prices rise faster than your pay, you earn more and still lose purchasing power.

How to calculate it

Real change = (1 + pay rise) ÷ (1 + inflation) − 1

A hypothetical example: your salary goes from 30,000 to 31,000, a 3.3% rise. If prices have risen 4% over the same time, you lose 0.6% of purchasing power. To stand still you would need 31,200, another 200. At the old prices, your new salary is worth 29,808.

With official data for Spain

According to Eurostat's HICP, prices in Spain rose 3.04% between December 2024 and December 2025. A 3% rise in 2025 barely held purchasing power: a salary of €30,000 needed to reach €30,913, and a 3% rise gives €30,900.

Over five years the gap is much larger. Between December 2020 and December 2025, prices in Spain rose 23%. If your salary rose 10% over that time, from €30,000 to €33,000, you lost 10.6% of purchasing power: to stand still you would need €36,904, and your €33,000 buys the same as €26,826 in 2020.

How to use it

• Use the same period for pay and inflation: from your last rise until today.
• Use your country's inflation. It can differ quite a lot from the European average.
• Compare gross with gross or net with net. Taxes can make your take-home pay rise less than your gross pay.
• Bring the figure to the conversation. Saying “to keep my purchasing power I need 31,200” is more concrete than asking for “a rise”.

Work out your case with the pay rise vs inflation calculator: it has a button to use official inflation for the period. And see how much prices rose between any two months with the inflation calculator.

Run your own numbers