Average raise percentage in 2026
What US employers actually budgeted this year, from four independent surveys — and what it means once inflation is counted.
The average US salary increase budget for 2026 is about 3.5%. That figure comes from four large employer surveys that were conducted independently and landed within half a percentage point of each other — an unusually tight consensus.
What the surveys found
| Source | 2026 budget | Basis |
|---|---|---|
| WorldatWork | 3.6% | Total salary increase budgets, 2025-2026 Salary Budget Survey |
| Mercer | 3.5% | Total increase budgets; merit component 3.3% |
| Payscale | 3.5% | Forecast US pay increases |
| WTW | 3.4% | Salary budget planning poll |
Two distinctions matter when reading these numbers. First, a total increase budget includes promotions, market adjustments and equity corrections; the merit component — the part distributed through the annual review — is smaller, around 3.3%. If you are comparing your annual review outcome to a benchmark, the merit figure is the fair comparison.
Second, a budget is an average across a whole workforce. Distributing it evenly would defeat its purpose: a 3.5% budget is meant to produce increases ranging from near zero for underperformers to well above the average for the people a company most wants to keep. If everyone in your team received the same percentage, that is a signal about how your employer manages pay, not about how you performed.
Against inflation
Consumer prices rose 3.4% over the 12 months ending July 2026 (BLS). Core CPI, excluding food and energy, rose 2.5%. Someone receiving exactly the average budgeted increase of 3.5% therefore came out at about +0.10% in real terms.
In other words the average American worker is treading water this year. That is a better outcome than the years when budgets lagged inflation by two or three points, and a worse one than the periods when real wages rose steadily. It also explains why raises feel smaller than they read: the number on the letter is positive while the experience of the year is flat.
What raises look like above and below the average
Merit increases in most US companies cluster in a narrow band. A rough map of what different outcomes signal:
- 0–1% — a freeze in all but name, or a performance issue you should ask about directly.
- 2–3% — below budget. Common in constrained years and in companies that spread the budget evenly.
- 3.5–4% — at or slightly above the market. The typical outcome for a solid performer.
- 5–7% — above budget. Usually a strong rating, a market correction or a retention decision.
- 8%+ — not from an annual cycle. Promotions, external offers and job-family repricing account for nearly all of these.
Why job changers do better
The gap between internal increases and external offers is the most persistent fact in US pay data. Internal budgets are set as a percentage of an existing payroll and are constrained by it; external offers are set against the market rate for a role. Someone who has been in the same job for five years has usually accumulated a gap that annual percentages cannot close, which is why a single move often delivers more than several years of increases combined.
That is an argument for benchmarking, not necessarily for leaving. Knowing the market rate for your role is what makes an internal conversation about a market adjustment possible — and market adjustments are the mechanism through which companies close these gaps when they are pointed out.
Figures updated 2026-09-02. This page is revised each year as new salary budget surveys are published.
Average raise FAQ
What is the average raise percentage in 2026?
About 3.5%. Four independent surveys of US employers — WorldatWork, Mercer, Payscale and WTW — put 2026 total salary increase budgets between 3.4% and 3.6%, with merit-only increases nearer 3.3%.
What is a normal annual raise?
Three to four percent for a standard merit increase in a US company. Anything above that usually reflects a promotion, a market adjustment or a retention decision rather than the routine annual cycle.
What is the average raise after 1 year of work?
For someone staying in the same role, the same 3–4% as everyone else — annual cycles rarely distinguish by tenure. The larger increases early in a career come from promotions and job changes, not from the first annual review.
Is the average raise keeping up with inflation?
Barely. Budgets of about 3.5% against CPI of 3.4% leave the average worker roughly flat in real terms — a real change of +0.10% for someone receiving exactly the average.
Do salary increase budgets differ by industry?
Yes, though less than people expect. The spread between most industries in recent surveys has been under a percentage point, with technology, financial services and healthcare typically at the top and retail, hospitality and non-profits at the bottom. The bigger variation is between individuals inside a company, not between sectors.
Calculators
- Pay Raise CalculatorNew salary, per paycheck, take-home and real raise.
- Hourly Raise CalculatorTurn a $/hour raise into weekly, monthly and annual pay.
- Raise After TaxesHow much of your raise you actually keep.
- Cost of Living Raise CalculatorCompare your raise with inflation and find the break-even.
- Salary Increase Over TimeCompound annual raises over 5, 10 or 20 years.
Estimates are for planning only. This is not tax, legal or financial advice.