A $100,000 salary in January 2021 needs to be $125,968 today to buy the same groceries, pay the same rent, and fill the same fuel tank. That is a 25.3% gap — and most Australian workers have not received a 25% pay rise in the past five years.
The question isn't whether you got a raise. It's whether you got a real raise — one that actually beat inflation. Here is how to calculate the exact dollar gap at your income, what the 2024 tax cut restored, and what the ABS data says about whether your industry is keeping up.
The five-year inflation hit: year by year
Here is how ABS All Groups CPI (catalogue 6401.0) compounded across each calendar year since 2020. The "salary needed" column shows what a $100,000 starting salary requires at each milestone to maintain the same purchasing power:
| Year | CPI rate | $100k salary needed | Cumulative gap |
|---|---|---|---|
| 2020 | 0.9% | $100,900 | $900 |
| 2021 | 3.5% | $104,432 | $4,432 |
| 2022 | 7.8% | $112,577 | $12,577 |
| 2023 | 4.1% | $117,193 | $17,193 |
| 2024 | 2.4% | $120,006 | $20,006 |
| 2025 | 3.6% | $124,326 | $24,326 |
| May 2026 | 4.1% (annualised) | $125,968 | $25,968 |
The damage accelerated in 2022 (7.8% — the post-COVID supply-chain peak) and has not slowed enough since. Even after the 2024 trough of 2.4%, CPI rebounded to 4.1% in early 2026, driven by energy costs and carbon pricing.
Enter your salary and the date of your last pay rise — the calculator compounds CPI across every year in between and shows your real income loss in 30 seconds.
Open Pay Rise CalculatorWage growth vs CPI: the ABS says you're still losing
The ABS Wage Price Index (WPI, catalogue 6345.0) measures how much employers are paying per hour of labour. The March 2026 quarter recorded 3.3% annual WPI growth. Meanwhile CPI for the same period is 4.1%.
That is a 0.8 percentage point real-wage cut in 2026 alone. Over the five years since 2021, cumulative WPI growth has been roughly 17% while CPI growth has been 25% — an 8 percentage point gap that means the average Australian worker buys less today than they did in early 2021, even after multiple pay rises.
Some industries are outrunning CPI: healthcare (+4.5% WPI), education (+4.2%), and mining (+4.4%) have all negotiated above-CPI enterprise agreements. Retail (+2.8%) and hospitality (+2.6%) are the worst-hit — still losing real purchasing power every quarter.
What the 2024 tax cut actually restored
The income tax brackets that took effect 1 July 2024 reduced income tax at every level above $18,200. Here is the annual saving by income, and how much of the inflation gap it closes:
| Income | Annual tax saving | Inflation gap (Jan 2021 → May 2026) | % restored |
|---|---|---|---|
| $45,000 | $804 | $11,686 | 7% |
| $80,000 | $1,679 | $20,775 | 8% |
| $100,000 | $2,179 | $25,968 | 8% |
| $135,000 | $3,729 | $35,057 | 11% |
| $190,000+ | $4,529 (max) | $49,341 | 9% |
The tax cut helps, but it restores only 7-11% of the gap. For a $100k earner, that's $2,179 restored out of a $25,968 hole. The other 92% needs to come from an actual pay rise.
How to ask for an inflation-matching pay rise
Three steps backed by data:
- Calculate your inflation-adjusted salary using the pay rise calculator. That gives you the exact dollar figure you need to be at parity — not a vague "I deserve more" but a verifiable number anchored to ABS data.
- Pull your industry's WPI growth from ABS catalogue 6345.0 and the latest Fair Work annual wage review as comparative benchmarks.
- Frame the request as real-income restoration, not a "raise". Present the year-on-year CPI accumulation alongside any productivity contribution. "I'm asking for restoration to parity, not a premium" is a different negotiation than "I want more money."
Your exact inflation-adjusted target salary, the gap, and the tax-cut offset — in 30 seconds.
Open Pay Rise CalculatorRBA forecast: where inflation goes from here
The RBA's February 2026 Statement on Monetary Policy forecasts CPI at ~4.0% through end-2026, falling to 2.8% by end-2027 and 2.5% by end-2028. If your employer says "inflation is coming down," they are correct about the trend — but not about the level. Prices don't drop when inflation falls; they just rise slower. The cumulative gap you've already lost is permanent unless you get a raise that closes it.
The pay-rise calculator uses these RBA forecasts to project forward, so you can see what you'd need in 2027 or 2028 if your employer offers a future raise instead of a current one.