Carry Calculator
Model your carried interest across fund return scenarios — from 1.0x to 5.0x.
| Return Multiple | Total Fund Value | LP Return | Total Carry Pool | Your Carry |
|---|---|---|---|---|
| Highlighted row = fund just crosses the hurdle. LP return shown after preferred return. Carry = (gross return − hurdle return) × carry %. | ||||
What Is Carried Interest?
Carried interest (or "carry") is the share of a fund's profits that general partners (GPs) receive as compensation, typically 20% of profits above a preferred return (hurdle rate). It aligns the GP's interests with limited partners (LPs) — GPs only get paid when LPs make money.
How it works: First, LPs get their capital back plus the preferred return (e.g., 8% per year). Then, profits above that threshold are split: typically 80% to LPs and 20% to the GP carry pool.
Formula used: Hurdle amount = fund size × (1 + hurdle%)^years. Carry pool = max(0, gross return − hurdle amount) × carry%. Your carry = carry pool × your share%.
Tax treatment: Carry is generally taxed as long-term capital gains if the underlying investments are held 3+ years (per the 2017 Tax Cuts and Jobs Act). The federal LTCG rate is 0%, 15%, or 20% depending on income. High earners also owe 3.8% Net Investment Income Tax (NIIT).