2026 Pay Raise Trends
What employers are budgeting, how inflation shapes your real raise, and where your raise ranks by industry and performance tier.
What Is the Expected Raise for 2026?
US employers planned an average 3.5% total salary increase for 2026, according to Mercer's compensation survey. This is roughly flat compared to 2025 budgets and reflects employer caution amid economic uncertainty.
“Expected” is not the same as “approved.” Companies set merit budgets in Q4 of the prior year, but individual raises depend on your performance rating, your manager's allocation, and whether the company adjusts budgets mid-year based on revenue. If you have not received your 2026 raise yet, ask your manager for the timeline.
The 3.5% average is across all employees — from underperformers to top performers. Companies increasingly concentrate limited budgets on their highest performers, meaning the gap between “average” and “top” raises continues to widen. See what counts as a good raise for context on where your raise ranks.
How Inflation Affects Your 2026 Raise
The BLS reported a 3.3% CPI-U increase for the 12 months ending March 2026. This is the inflation rate your raise needs to beat for you to gain real purchasing power.
Real raise = nominal raise − inflation
3.5%
Median raise (Mercer)
3.3%
CPI-U inflation (BLS)
0.2%
Real purchasing power gain
A 3.5% raise on $60,000 = $2,100/year. After adjusting for 3.3% inflation, the real gain is about $120/year. For a raise that meaningfully grows your purchasing power, you need to beat 3.3%.
For a deeper look at how inflation interacts with raises, see our guide on COLA vs merit raises.
Illustrative Raise Ranges by Sector
Merit increase budgets vary by industry. The positions below are common planning ranges relative to the 3.5% average — actual figures depend on company size, region, and role.
| Sector | Typical Position vs Median |
|---|---|
| Technology | Higher end of merit budgets |
| Finance / Banking | Above median |
| Healthcare | Near median |
| Manufacturing | Near median |
| Retail / Hospitality | At or below median |
| Non-profit / Government | Below median |
Source: Average total salary increase budget 3.5% (Mercer 2026). High-cost metros may require a higher nominal raise to feel equivalent, but employer budgets vary by company and role. These are illustrative ranges.
For a broader look at how average raises are measured and what data sources to trust, see how average raises are measured.
Top Performers vs Average: The Widening Gap
Companies are increasingly concentrating limited merit budgets on their highest-rated employees. The result: the gap between “meets expectations” and “exceeds expectations” raises continues to widen.
| Performance Tier | Illustrative Raise Range |
|---|---|
| Below expectations | 0-1% |
| Meets expectations | 2.5-3.5% |
| Exceeds expectations | 4-6% |
| Top performer | 6-8%+ |
These are illustrative ranges based on common merit pool distribution patterns, not specific company data.
If you want to know where a specific percentage lands, see our good raise percentage guide or use the annual raise calculator to project how your raise compounds over time.
Calculate Your 2026 Raise
Enter your current salary and raise percentage to see the impact across all pay periods, including an after-tax estimate.
Your Salary
Your Raise
$2,500.00
+5.00% increase
New Annual Salary
$52,500.00
from $50,000.00
Per Paycheck
+$96.15
bi-weekly increase
After-Tax Increase
+$1,950.00
estimated annual take-home
Hourly
+$1.20
Before
$24.04
After
$25.24
Weekly
+$48.08
Before
$961.54
After
$1,009.62
Bi-Weekly
+$96.15
Before
$1,923.08
After
$2,019.23
Monthly
+$208.33
Before
$4,166.67
After
$4,375.00
Annual
+$2,500.00
Before
$50,000.00
After
$52,500.00
| Period | Before | After | Increase |
|---|---|---|---|
| Hourly | $24.04 | $25.24 | +$1.20 |
| Weekly | $961.54 | $1,009.62 | +$48.08 |
| Bi-Weekly | $1,923.08 | $2,019.23 | +$96.15 |
| Monthly | $4,166.67 | $4,375.00 | +$208.33 |
| Annual | $50,000.00 | $52,500.00 | +$2,500.00 |
After-Tax Impact
$43,947.00 → $45,897.00 (+$1,950.00/yr)
Est. US federal effective rate. Varies by state and deductions.
Real Raise (Inflation-Adjusted)
Your raise: 5.0% — Inflation (CPI): 3.3% → Real purchasing power change: +1.7%
Estimates are for informational and planning purposes only. They do not constitute financial, tax, or legal advice. See our disclaimer.
2026 Raise Trends Questions
- What is the expected raise for 2026?
- US employers planned average total salary increases of 3.5% for 2026, according to Mercer’s compensation survey. This includes both merit increases and other adjustments. Individual raises vary widely by performance, industry, and role — top performers typically receive significantly more than the average.
- Is the salary increase for 2026 approved?
- Whether your 2026 raise is “approved” depends on your employer. Most US companies finalize merit increase budgets in Q4 of the prior year and communicate individual raises in Q1. If you have not yet received your raise, ask your manager about the timeline — some companies process increases in March or April.
- What is the salary increase percentage for 2026?
- The average total salary increase budget for 2026 is 3.5% (Mercer). Merit-only budgets are typically slightly lower at around 3.2%. Technology and finance sectors tend to budget above the average, while retail, hospitality, and non-profit tend to budget at or below it.
- What is the average increase for 2026?
- The BLS Employment Cost Index (ECI) measures actual compensation changes. Compensation consulting firms report planned merit budgets around 3.2-3.5% for 2026. The key distinction: “average” includes everyone from underperformers (0-1%) to top performers (6%+). Your individual raise depends on which performance tier you fall into.