How this calculator works
Enter cumulative inflation for the entire interval, not an annual rate unless the interval is one year. You can obtain the cumulative change from a Canadian CPI index ratio. The calculator compares your current salary with the amount needed to preserve purchasing power. It uses no tax-year rates.
Formula
Adjusted salary = reference salary x (1 + cumulative inflation). Real current salary = current salary / (1 + inflation). Real change = current / adjusted - 1.
Worked example
A $50,000 reference salary needs to reach $55,000 after 10% cumulative inflation. A current salary of $54,000 is $1,000 short and has purchasing power of $49,090.91 in reference dollars.
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Frequently asked questions
How do I combine several annual inflation rates?
Multiply their factors, such as 1.03 x 1.04, then subtract 1. Adding percentages is only an approximation.
Does CPI match my personal expenses?
CPI represents a broad basket. Your own spending mix can experience a different change.
Which tax year is used?
None. Enter the inflation for the period you want to compare; no tax liability is calculated.