Published 29 October 2026 · Salary
If your employer cuts your pay by 10% now and promises a 10% raise later, you'll still end up earning less than you started with.
The math
Start with a $50,000 salary.
- A 10% cut takes it to $45,000.
- A 10% raise on $45,000 adds $4,500, bringing it to $49,500.
You're still $500 short. The cut is taken from $50,000 but the raise is calculated on the smaller $45,000, so the same percentage gives you fewer dollars back.
To get back to exactly $50,000 you'd need $5,000 on top of $45,000. That's an 11.1% raise.
The raise you need after any pay cut
To work out the recovery raise, divide the cut by what's left after the cut:
Raise needed = cut ÷ (1 − cut)
| Pay cut | Raise needed to recover |
|---|---|
| 5% | 5.26% |
| 10% | 11.11% |
| 15% | 17.65% |
| 20% | 25.00% |
| 25% | 33.33% |
The gap widens as the cut gets bigger. A 20% cut needs a 25% raise to undo, and a 25% cut needs a third more pay.
You can see the exact effect of any cut on your own pay with the pay cut calculator.
A temporary cut still costs real money
Even if your pay is restored on schedule, the months at the lower rate are gone. A 10% cut on a $60,000 salary that lasts six months costs you $3,000 before tax, unless the employer pays it back later.
Other things can shrink with it:
- Retirement contributions set as a percentage of pay, and any employer match
- Bonuses calculated from base salary
- Overtime rates, if you're paid by the hour
- The starting point for your next raise
What to ask before you agree to a pay cut
- Is the cut temporary? If so, when exactly does it end?
- Will the missed pay be paid back later?
- Are your hours or responsibilities reduced as well?
- Will the next raise be calculated on the reduced salary or the original one?
- Does the cut affect benefits, retirement matching or bonuses?
Get the answers in writing. If the plan is "cut now, raise later," ask for the later raise to restore your original salary rather than for a percentage.
If you're comparing your options, the salary increase calculator shows what any raise would give you per paycheck.