How To Ask for a Raise (and What You Can Consider Doing With the Extra Cash)

This article was last updated in July 2024.

Are you looking for a raise but unsure how to ask? Whether you want to keep up with the rising cost of living, see others around you making more or want a raise simply because you deserve it, going into that conversation with a strategy can improve your odds of getting your way.

Here are a few tips to help you get the upper hand in your negotiations and some ideas for what to do with the extra cash after you land your raise.

Tout your accomplishments

Knowing you’re doing a good job is one thing; ensuring your boss knows is another. Individual accomplishments can easily get overlooked when everyone is busy, so it’s important to remind your employer what you’re bringing to the team. Try setting up regular one-on-ones or find other opportunities to discuss what you’re working on. Don’t be afraid to share your career aspirations and how you’re sharpening your skills to make you an even more valuable employee.

Build a business case

The reward for hard work tends to be more work – especially when you’re really good at your job. Over time, the role you have might become different from the one you were hired for. If you find yourself in this position, see it for what it is: an opportunity. Make a business case to explain why you deserve to be rewarded for taking on additional responsibilities. You can even pitch a title change to ensure your contributions match your job description.

Do your research

Before asking for a raise, look around to see what other comparable roles are earning, either within the company or at a competitor. Chatting with friends or colleagues can also be an effective way to see if you’re underpaid. By doing your research, you will be able to point to examples and make the case for why you deserve a bump in pay.

Stop waiting for the perfect time

Don’t get too hung up looking for the right time to ask for a raise. Bringing up salary during a positive performance review is a natural opportunity to talk up your contributions and signal that you’re ready to take on a bigger role, but don’t stop there. Be assertive and don’t let the odd “no” be a deterrent to advocate for yourself. If a manager turns down your request, take note of their feedback, since that nugget of information could help when you revisit this conversation down the road.

Play the long game

Not sure if you can make a strong case for a raise now? That’s OK. Instead, find out what you can do to make your case in the future. Are there any performance benchmarks you need to hit or skills you can learn to make you an indispensable member of the team? Once you know what your employer is looking for, you’ll gain confidence when you’re ready to talk about your compensation.

What to do once you get a raise

Once you get a raise, it’s important to have a plan for that bigger paycheque. There’s nothing wrong with splurging on yourself a little, but consider putting some of that extra cash to work too. Before adjusting your spending, take some time to see how much you have in your account after a few weeks.

If you’re comfortably able to afford your monthly bills, then consider setting up a pre-authorized contribution (PAC) to an investment account, like a Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP), on a schedule that works for you. You can change or cancel your contributions at any time.

A PAC makes it easy to get into the habit of saving, since the money automatically gets withdrawn from your savings or chequing account and transferred into your investment account, where you can invest it any way you want. By setting up the transfer to coincide with your paycheque, chances are you won’t even notice the money leaving your account. Even small amounts can make a big difference. Say you set up a PAC to direct $25 from your biweekly paycheque into your investment account; if you invest those contributions each time they hit your account and can maintain a 5% annual return, you could have almost $3,700 after five years¹.