Average Raise Percentage 2026: What's Normal & How to Get More

The Myth of the "Normal" 3% Raise

Ask most HR professionals what constitutes a normal annual raise, and you will hear "3 to 4 percent." That figure has calcified into conventional wisdom over two decades of low-inflation stability. The problem: in an environment where the Consumer Price Index has averaged 3–4% annually since 2021, a 3% raise is not treading water. It is losing ground.

According to the Bureau of Labor Statistics, real average hourly earnings for all employees increased just 1.1% from December 2024 to December 2025 — after stripping out inflation. That means an employee who received the "average" 3.5% raise in 2025 saw their actual purchasing power increase by just over one percentage point. Their rent, groceries, and healthcare likely rose faster than their paycheck in real terms.

This is the context in which 2026 raise negotiations are happening. The average number matters less than what the average number means relative to the economy workers are actually living in. With that framing established, here is what the current data shows.

What Is the Average Raise Percentage in 2026?

Five major compensation surveys point to a remarkably consistent number for 2026. The convergence is notable because these surveys draw from different employer samples and methodologies:

The BLS Employment Cost Index (ECI), which tracks actual wage and salary changes rather than employer budgets, reported a 3.3% increase in wages and salaries from December 2024 to December 2025. This suggests budget intentions are translating fairly closely to real outcomes — there is not a large gap between what employers planned and what they paid.

It is important to distinguish between total increase budgets and merit increases. Total budgets include promotional increases, market adjustments, and general/across-the-board increases. Merit increases are the performance-based portion — what most employees think of as their "raise." Merit alone is running 3.1–3.3% in 2026, while additional structural adjustments make up the difference.

Average Raise by Industry in 2026

The 3.5% headline obscures meaningful variation across sectors. Industry supply-demand dynamics, post-pandemic labor market tightening, and sector-specific profit pressures all shape what employers can — and choose to — pay. According to WorldatWork and Mercer research, here is the industry breakdown for 2026:

The technology sector decline is particularly noteworthy. After years of outsized increases (5–7% merit budgets in 2021–2022), tech employers have pulled back significantly. Per Payscale's Salary Budget Survey, planned tech pay increases for 2026 are 0.5 percentage points lower than 2025 — a continuation of the contraction that began with the wave of layoffs in late 2022 and accelerated by AI-driven headcount efficiency strategies.

Healthcare's low raise budgets are somewhat paradoxical given the well-documented nursing and physician shortages. The reason: hospitals and health systems front-loaded massive wage increases in 2022–2023 to address turnover and are now managing tighter reimbursement environments from CMS. The catch-up raises already happened — what remains is slower-growth maintenance budgeting.

Raise by Performance Rating: The Actual Distribution

When your employer says the "average raise is 3.5%," that is a budget number — an average across all employees including those who received nothing (due to poor performance, being hired recently, or being on a leave of absence). The distribution of merit increases by performance tier looks quite different:

This distribution reveals an important truth: the 3.5% budget is a blended number. A high performer receiving 6% and a low performer receiving 1% averages out to 3.5% — but the outcomes for individual employees could not be more different. Most workers rated "meets expectations" — the largest single cohort in any organization — receive 2.5–3.5%.

According to WorldatWork's research, the difference between a "meets expectations" raise and an "exceptional" raise is 2–4 percentage points. On a $75,000 salary, that difference is $1,500–$3,000 annually — and it compounds over time through future raise calculations, 401(k) match percentages, and bonus targets that are often pegged to base salary.

Historical Context: How 2026 Compares to Prior Years

The 3.5% figure for 2026 represents a cooling from the post-pandemic wage surge. To understand whether this is high or low historically, it helps to see the full trajectory:

Two years (2021 and 2022) stand out as worker-unfriendly: nominal raises lagged CPI inflation significantly, producing real wage declines. Workers who did not change jobs during those years lost purchasing power even while receiving "above average" nominal increases. The 2023 rebound was the exception, not the rule.

The 2026 projection of 3.5% with inflation potentially running 2.8–3.2% means real wage growth of just 0.3–0.7% for the average worker. Meaningful, but barely. This is the underlying data behind widespread worker dissatisfaction even in a tight labor market: nominal numbers look acceptable; real numbers are thin.

Why Job Changes Beat Merit Raises — The Math

The most consistent finding in compensation research is that switching employers delivers larger pay increases than staying put. ADP Research Institute data consistently shows that job changers earn 10–20% more in their new role than they made in their previous job. By comparison, even top performers in merit-raise cycles typically max out at 6–8%.

The compounding effect is even more striking. Consider two employees both earning $70,000 in 2020:

One strategic job change can produce a $13,000+ annual income difference that persists and compounds across the employee's entire career. This is not a hypothetical — it is what ADP Research Institute consistently documents when they track actual pay trajectories for millions of workers.

The implication for 2026 is clear: if you are rated "meets expectations" at a company with a 3.5% budget and inflation is running near that level, the internal raise path is not generating real wealth. A targeted search for roles with 10–20% premium is mathematically the dominant strategy. Use our Salary Negotiation Tips Guide to prepare for that conversation.

How to Get a Raise Above the Average in 2026

If you are committed to getting a meaningful raise at your current employer, there is a methodology that works — and it is not about tenure or asking nicely. According to SHRM research, employees who provide documented performance evidence and market rate data in raise conversations receive 12–18% higher outcomes than those who rely on general conversations.

Step 1: Establish Your Market Rate First

Before any salary conversation, you need to know what your role pays in your labor market. Use the BLS Occupational Employment and Wage Statistics (OEWS) database for your occupation and state, cross-referenced with Glassdoor, Payscale, and LinkedIn Salary Insights. Pull the 50th, 75th, and 90th percentile data. If you are at the 50th percentile, a market adjustment argument gets you to the 75th — that could mean a 10–15% increase framed not as a raise but as a correction.

Our Salary Benchmarking Guide walks through exactly how to pull and present this data credibly.

Step 2: Quantify Your Impact in Dollar Terms

Vague claims ("I work hard") are ignored. Specific numbers ("I reduced customer churn by 8%, retaining approximately $340,000 in ARR") create negotiating anchors. In every role, there are metrics that connect to revenue, cost reduction, or risk mitigation. If you cannot articulate your dollar-denominated contribution, your manager will struggle to justify a large increase to their own leadership and budget process.

Step 3: Time It Correctly

Most companies finalize salary budgets 60–90 days before the new fiscal year. For calendar-year companies, that means September through November is when managers are actually deciding how to allocate merit dollars. A December conversation — after budgets are locked — produces a very different outcome than an October conversation when there is still flexibility. Know your employer's fiscal calendar and work backwards.

Step 4: Ask for a Specific Number

Negotiate with specificity. "I would like a 7% increase" is a better opening than "I was hoping for something above average." Research from CareerBuilder shows 73% of hiring managers expect negotiation, and the median outcome is about 85% of the first counter-ask. If you want 6%, ask for 8%. If you want 8%, ask for 10%. Anchoring high is not aggressive — it is expected.

For a complete script and timing strategy, see our guide on How to Ask for a Raise. Once you have a number in mind, use the Pay Raise Calculator to see exactly how different percentage increases affect your annual salary and monthly take-home pay.

Cost of Living Adjustments vs. Merit Raises: What's the Difference?

Many employees conflate cost of living adjustments (COLAs) with merit raises, but they are fundamentally different mechanisms with different implications for your total compensation trajectory:

The 2026 WorldatWork salary increase budget of 3.6% is a blended number: approximately 1.7% in general/COLA-type increases, 3.3% merit, and 0.7% equity/market adjustments, per their survey methodology. Not every employee receives all three components — most receive only the merit portion, which is why the actual distribution often feels smaller than the headline number suggests.

For federal employees, COLAs are formally tied to the Employment Cost Index — a different mechanism than private sector merit cycles. The 2026 federal pay raise was 2.0% across-the-board, with locality pay adjustments adding 0.5–1.0% in high-cost metro areas.

When a Raise Isn't Enough: Total Compensation Perspective

Base salary is one component of total compensation. According to the Bureau of Labor Statistics' Employer Costs for Employee Compensation data, benefits account for approximately 30.5% of total compensation for civilian workers. This means a company with a 3.5% merit raise but rich benefits — health insurance, 401(k) matching, paid time off — may deliver more total value than a competitor offering a 5% raise with bare-bones benefits.

When evaluating whether your raise is adequate, consider the full picture. Our Total Compensation Guide explains how to calculate the dollar value of benefits to make apples-to-apples comparisons between employers. A $5,000 employer 401(k) match and $15,000 in employer-paid health premiums represents $20,000 in compensation that never appears in your base salary — but is very real income.

Similarly, if your raise falls short of your expectations, a counter-offer does not have to be purely salary-focused. Additional paid time off, a flexible work arrangement, a professional development budget, or an accelerated performance review cycle can all have meaningful value. These are often easier for managers to approve than a large base salary increase, because they do not permanently inflate fixed compensation costs.