A 3% raise is roughly average. It’s slightly below the national median salary increase budget of 3.5% that employers have been planning in recent years, but it’s close enough that most workers receiving 3% are getting a standard cost-of-living adjustment rather than a reward for standout performance. Whether it’s “good” depends on your industry, your role, your performance rating, and what inflation is doing to your purchasing power.
How 3% Compares to the National Average
Employer salary increase budgets have hovered around 3.5% as a median figure, and projections for 2026 suggest that number will hold steady. That means a 3% raise puts you slightly below the midpoint of what companies are budgeting across all employees. Keep in mind that the 3.5% median includes everyone from new hires getting market adjustments to top performers receiving merit bumps, so a 3% raise for a solid but not exceptional review is well within normal range.
Before the pandemic, annual raises typically clustered around 3%, and that was considered standard for years. Post-pandemic inflation pushed budgets higher, and raises above 3% have become the new baseline in many industries. Payscale’s salary budget data notes that wages have remained above 3% globally since pandemic-era inflation reshaped employer expectations. So while 3% isn’t bad, it’s no longer the generous figure it was a decade ago.
What Inflation Does to a 3% Raise
The real question isn’t the number on your paycheck stub. It’s whether your raise outpaces the rising cost of everything you buy. The Federal Reserve’s median projection for PCE inflation (the price measure it tracks most closely) sits at 2.7% for 2026, with estimates ranging as high as 3.3%.
If you get a 3% raise and inflation runs at 2.7%, your purchasing power grows by roughly 0.3%. On a $60,000 salary, that’s about $180 in real terms over the entire year. If inflation lands at the higher end of projections, a 3% raise could actually leave you breaking even or slightly behind. In practical terms, a 3% raise in a moderate-inflation environment keeps you treading water rather than getting ahead.
Industry Matters More Than You Think
Not every industry pays raises the same way. Education and food, beverage, and hospitality sectors tend to offer lower-than-average increases, so 3% in those fields might actually be above your peers. Meanwhile, tech companies have historically offered higher raises, though planned pay increases in technology are trending down by about half a percentage point for 2026 compared to the prior year.
If you work in a high-demand field like healthcare, engineering, or cybersecurity, 3% may signal that your employer isn’t keeping pace with market rates for your skills. In slower-growth industries with tight margins, 3% might be the best your company can do. Checking salary data for your specific job title and location gives you a much better benchmark than any national average.
Merit Raise vs. Promotion Raise
Context matters. A 3% annual merit raise for meeting expectations is standard. A 3% raise attached to a promotion with new responsibilities and a bigger title is a different story, and not a good one. Many companies cap promotional raises at around 10% of base pay, and the typical bump for taking on a higher-level role falls somewhere between 5% and 15%. If you’re being promoted and offered only 3%, you’re essentially being given more work at your current pay rate adjusted for inflation.
If your raise came with a “meets expectations” performance review, 3% is in line with what most employers allocate for that tier. Employees rated as top performers usually receive 4% to 5% or more from the same budget. If you believe your contributions exceeded expectations but your raise didn’t reflect that, the issue may be less about the percentage and more about how your performance was rated.
How Switching Jobs Compares
Workers who change employers have historically seen larger pay bumps than those who stay put, though that gap has narrowed. Recent Bank of America payroll data shows job switchers seeing median pay increases around 4% to 4.4%, while job stayers average about 3.9%. In 2022 and 2023, the gap was much wider, with switchers routinely landing 10% to 15% bumps. The current job market has compressed that advantage significantly.
This means jumping ship for a bigger raise is still possible, but the payoff is smaller than it was a couple of years ago. If you’re otherwise happy at your job and received 3%, the incremental gain from switching may not justify the risk and disruption. If you’re unhappy and underpaid relative to market rates, even a modest 4% to 5% bump elsewhere comes with the added benefit of resetting your base salary at a new employer.
How to Evaluate Your Specific Situation
Rather than asking whether 3% is good in the abstract, compare it against three things. First, check what your role pays at other companies. Free salary tools from job sites let you search by title, experience level, and location. If your current pay is already at or above market rate, a 3% raise is maintaining a strong position. If you’re 10% below market, a 3% raise means you’re falling further behind each year.
Second, look at your company’s overall raise budget. Some employers share this information openly. If the company-wide budget was 3% and you got 3%, you received an average allocation. If the budget was 4% and you got 3%, your manager directed more of the pool toward other team members.
Third, factor in the full compensation picture. A 3% base raise paired with a strong bonus, equity grant, or improved benefits package can add up to a total compensation increase well above 3%. A 3% raise with no bonus and rising healthcare premiums might actually leave you with less take-home pay than last year.