Disclaimer: This calculator provides estimates only and should not be considered financial or tax advice. Always consult with a qualified tax professional or accountant before making investment decisions. This tool does not constitute advice from the Australian Taxation Office. Evercend Pty Limited does not hold an Australian Financial Services Licence.
Inflation calculator inputs and results
Leave blank to use the RBA average of 2.5% per year. Enter a custom rate to model different scenarios.
Enter an amount to get started
Enter a dollar amount, select a year range and see the inflation-adjusted value in both directions.
How inflation affects buying power in Australia
This calculator estimates how the buying power of a fixed amount of money changes over time at an assumed constant annual inflation rate. Inflation is a rise in the general level of prices, which means a given amount of money buys fewer goods and services over time. In Australia, inflation is measured by the Consumer Price Index (CPI), which is calculated independently by the Australian Bureau of Statistics.
How this calculator works
The calculator applies a chosen annual inflation rate across a number of years using compounding, so the effect builds each year on the year before. It can show how much a fixed amount today would need to grow just to keep the same buying power in future, or how much the buying power of today's money would fall over time. The default rate is 2.5 per cent per year, which is the midpoint of the Reserve Bank of Australia's 2 to 3 per cent inflation target and is used here as a long-range planning assumption.
Assumptions used
The calculator applies a single constant rate every year. Real inflation varies from year to year and can sit above or below the target band, so a constant-rate result is a planning scenario, not a forecast and not a historical CPI calculation. Results are estimates for general information only. A particular household's spending mix can differ from the CPI basket, so its personal experience of inflation may differ from the published figure. For actual historical CPI, use official ABS data or the Reserve Bank of Australia's Inflation Calculator.
Worked example
In the 12 months to June 2026, the ABS reported CPI inflation of 3.8 per cent, and underlying inflation measured by the trimmed mean was 3.6 per cent. The largest contributors to annual inflation were Housing at 6.8 per cent, Food and non-alcoholic beverages at 3.3 per cent, and Recreation and culture at 3.3 per cent. Because actual inflation changes over time, the default 2.5 per cent planning rate can differ from the current published rate.
At a constant 2.5 per cent per year, a fixed amount needs to grow just to hold its buying power. For example, $100 would need to become about $128 after 10 years and about $164 after 20 years to buy the same goods and services. This is an illustration of the calculator's constant-rate formula, not a forecast. For an actual historical figure, the Reserve Bank of Australia's Inflation Calculator shows a basket of goods and services worth $100 in the calendar year 2000 would have cost about $150.60 by 2015.
The calculator applies the rate and period entered to produce a planning estimate, not a historical CPI figure.
What changes the effect of inflation
Several things change how much inflation erodes buying power over time. The main ones are:
Inflation rate assumed
A higher rate erodes buying power faster; a lower rate erodes it more slowly.
Number of years
Compounding makes longer periods matter more, since the effect builds each year on the year before.
Investment return
A return above inflation preserves or grows buying power while a return below inflation erodes it.
Spending pattern
A household's own spending mix can differ from the CPI basket, so its personal experience of inflation may differ from the published figure.
Headline vs underlying inflation
Headline CPI covers the full basket, while underlying measures such as the trimmed mean strip out volatile items to show the trend.
Rates and assumptions used
| Item | Value used | Source |
|---|---|---|
| Current CPI and underlying inflation (12 months to June 2026) | 3.8% headline CPI; 3.6% trimmed mean | Australian Bureau of Statistics, Consumer Price Index, Australia |
| Inflation target and the 2.5 per cent midpoint default | 2 to 3% target; 2.5% midpoint used as default planning rate | Reserve Bank of Australia, Inflation overview |
| Actual historical CPI calculations | Available via the RBA Inflation Calculator | Reserve Bank of Australia, Inflation Calculator |
Figures checked against the sources above on 10 August 2026.
Frequently asked questions
No. It applies a single constant rate chosen across the period, which is a planning scenario rather than a historical CPI calculation. For actual historical CPI, use official ABS data or the Reserve Bank of Australia's Inflation Calculator.
It is the midpoint of the Reserve Bank of Australia's 2 to 3 per cent inflation target, used as a long-range planning assumption. Actual inflation can sit above or below the band in any given year.
The Consumer Price Index is calculated independently by the Australian Bureau of Statistics. From November 2025 the ABS began publishing the CPI monthly, having previously published it quarterly.
Headline CPI covers the whole basket of household goods and services, while underlying measures such as the trimmed mean exclude the most volatile price movements to show the trend. In the 12 months to June 2026 headline CPI was 3.8 per cent and the trimmed mean was 3.6 per cent.
Related calculators and guides
Sources
- •Australian Bureau of Statistics, Consumer Price Index, Australia
- •Reserve Bank of Australia, Inflation overview
- •Reserve Bank of Australia, Inflation Calculator
Content reviewed and figures checked against the sources above on 10 August 2026.