How is the calculation of the annual increase in salary ?

many things involved  with in that question. however; lats just take it with in your basic salary. 

at first you have to know what is the minimum and the max of the % the company give each year, and what is it based on, such as targets and performance.  but lats say the annual increase is %5. 

This year’s salary = (100% + 5%) of last year’s salary = 105% of last year’s salary

as simple as that.  just assure the it is with in the basic salary.