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 rose an average of about 4.5% a year from 2021 through 2025 (December-to-December), 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. CPI rose 2.7% over the same period, so an employee who received a 3.5% raise in 2025 saw purchasing power rise by less than one percentage point. Their rent, groceries, and healthcare likely rose faster than their paycheck in real terms.

The most recent BLS readings make the point sharper. Private-sector average hourly earnings were $37.75 in August 2026, up 3.1% from $36.62 a year earlier (BLS Current Employment Statistics, series CES0500000003). Over the same twelve months CPI-U rose 3.4% (BLS, series CUUR0000SA0). The arithmetic, 3.1% minus 3.4%, puts the average worker's real hourly pay down roughly 0.3% year over year.

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 similar number for 2026. The figures below are as publicly reported by each firm for its 2025–2026 / 2026 survey cycle and were not independently verified by Salario; check each publisher's release for final numbers:

The BLS Employment Cost Index (ECI), which tracks actual wage and salary changes rather than employer budgets, rose 3.4% for private-industry wages and salaries from Q4 2024 to Q4 2025, and 3.1% year over year as of Q2 2026 (BLS ECI, FRED series ECIWAG; percentages computed by Salario from the index). 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. Here is an approximate industry breakdown for 2026 as publicly reported from the WorldatWork 2025–2026 Salary Budget Survey and Mercer 2026 compensation planning survey summaries (not independently verified by Salario; the "key driver" column is Salario's editorial interpretation):

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. Planned tech pay increases for 2026 are reported to be lower than in 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. The table below is an illustrative merit-matrix model of how a 3.5% budget is typically allocated across rating tiers, not a survey result, so treat the percentages as a planning template, not measured data:

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%.

In the illustrative distribution above, the difference between a "meets expectations" raise and an "exceptional" raise is roughly 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 see whether that is high or low historically, the cleanest yardstick is the BLS Employment Cost Index for private-industry wages and salaries, a measure of what employers actually paid, not what they budgeted, set against December-to-December CPI-U inflation:

Sources: BLS Employment Cost Index, wages and salaries, private industry workers (FRED series ECIWAG, Q4-over-Q4 percentage change computed by Salario); BLS CPI-U, all items, not seasonally adjusted (FRED series CPIAUCNS, December-over-December). 2026 row uses the latest available readings. Real change is the simple difference of the two rates.

Two years (2021 and 2022) stand out as worker-unfriendly: measured wage growth lagged CPI inflation, producing real wage declines even though nominal raises were the largest in two decades. Workers who did not change jobs during those years lost purchasing power while receiving "above average" nominal increases. 2023–2025 clawed some of that back, but only by roughly 0.7–0.9 points a year.

So far in 2026 the picture has tipped slightly negative again: wage growth of about 3.1% against 3.4% inflation. A 3.5% raise budget, if fully delivered, roughly matches inflation. This is the underlying data behind widespread worker dissatisfaction even in a reasonably 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 Pay Insights, for example, tracks pay growth for job changers and job stayers separately each month, and job changers have typically posted faster pay growth. The size of an individual job-change raise varies widely, while even top performers in merit-raise cycles often top out in the mid-to-high single digits.

The compounding effect is even more striking. Consider two employees both earning $70,000 at the end of 2020, with raises equal to the BLS ECI wage growth in the table above:

One strategic job change can produce a roughly $8,900 annual income difference that persists and compounds across the employee's entire career. This is a hypothetical illustration using the BLS ECI figures from the table and an assumed 15% job-change increase; real outcomes vary widely.

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. Documented performance evidence and market rate data give your manager concrete justification for a larger increase than a general conversation does.

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." Many managers expect some negotiation, and the final number often lands below the opening 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.

What a 3%, 4% or 5% Raise Is Worth on Real Median Pay

Percentages hide the dollars. The table applies three common raise sizes to the BLS OEWS May 2025 national median annual wage for ten large occupations (and for all occupations combined). Every figure is before tax; because the increase is taxed at your marginal rate, take-home typically rises by roughly 70–80% of the amount shown.

Source: U.S. Bureau of Labor Statistics, Occupational Employment and Wage Statistics, May 2025 (bls.gov/oes), national median annual wages. Raise amounts computed by Salario (median × percentage, rounded to the dollar).

To see the after-tax effect of a specific raise on your own salary and state, run the numbers through the paycheck calculator or the salary calculator; for hourly workers, the hourly-to-salary converter turns a per-hour increase into an annual figure.

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:

Merit figures are from the survey summaries cited above; the other rows describe how each component is typically set and are not survey averages.

A total salary increase budget is a blended number that can include general/COLA-type increases, merit increases, and market or equity adjustments; the component averages are not additive across all employees. 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 annual federal pay adjustment, including any locality pay change, is set through the President's pay plan and Congress; check OPM's 2026 General Schedule pay tables for current rates.

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 accounted for about 31.6% of total compensation costs for civilian workers in June 2026 ($15.61 of $49.46 per hour worked), figures as previously cited on this page from the BLS ECEC release; not re-verified on September 17, 2026. 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.