Calculating the impact of a pay cut
Pay cuts happen for many reasons — reduced hours, a company-wide reduction, a career change, or moving to a lower-cost area. Knowing the precise impact on each paycheck helps you adjust your budget before the change takes effect.
New pay = current pay × (1 − cut % ÷ 100). The calculator also shows the change per month, paycheck, week and hour.
Example: Dana's $70,000 salary is cut by 8%. The reduction is $5,600 a year, or $466.67 a month and $215.38 per biweekly paycheck. New salary: $64,400.
Planning for less income
- Recalculate your budget using the new monthly figure.
- Check whether retirement contributions are set as a percentage — they'll fall automatically.
- A lower income can mean slightly lower taxes, so take-home pay may fall a little less than gross.
The recovery math
Because percentages compound, a 10% cut followed by a 10% raise leaves you 1% below where you began. To recover fully from a cut of c%, you need a raise of c ÷ (100 − c) × 100%.
Evaluating a lower-paying job with other benefits? Use the salary comparison calculator to weigh hours and overtime too.