A raise of 3.5% is the current baseline for U.S. employers, so anything above that is doing better than average. Whether your raise is actually “good” depends on the context: a standard annual merit increase, a promotion bump, and a job-switch offer each operate on very different scales. Here’s how to measure what you got (or what you’re about to ask for) against real benchmarks.
The Average Annual Raise Right Now
U.S. employers are budgeting about 3.5% for salary increases in 2026, a figure that has held steady since 2025. That number represents the median across all industries and includes merit raises, cost-of-living adjustments, and market corrections lumped together. If your raise lands at 3.5%, you’re getting exactly what the typical employee gets. A raise of 4% to 5% with no change in title or responsibilities puts you ahead of the pack.
Keep in mind that 3.5% is a budget average, not a guarantee. Companies distribute that pool unevenly. Top performers often receive 4% to 6%, while average performers may see 2% to 3%, and underperformers may get nothing. If your manager rated your performance highly and you still landed at 3%, you may be getting shortchanged relative to what the company allocated for its best employees.
What Inflation Does to Your Raise
A raise only makes you wealthier if it outpaces inflation. Real average hourly earnings (wages adjusted for price increases) rose 1.1% from December 2024 to December 2025, according to the Bureau of Labor Statistics. That means a worker who got a 3.5% raise during that period gained roughly 1 to 1.5 percentage points of actual purchasing power after accounting for rising costs.
If your raise matches or falls below the inflation rate, your paycheck buys the same amount or less than it did last year. That’s not a raise in any practical sense. When evaluating an offer, subtract the current annual inflation rate from the percentage you’re being given. The remainder is your real raise. A 2% bump during a year with 3% inflation is effectively a 1% pay cut.
Promotion Raises Follow Different Rules
When a raise accompanies a new title, more responsibility, or a move into management, the numbers shift upward. Many companies cap internal promotion increases at around 10% of base pay, though the actual amount varies by organization and the size of the role change. A bump of 8% to 15% is common for a meaningful promotion, such as moving from individual contributor to team lead, or from manager to director.
If you’re being promoted but offered only 3% to 4%, that’s a merit-level increase dressed up as a promotion. The additional workload and expectations that come with a higher title typically warrant a larger jump. A useful test: research the market rate for the new role using salary databases, then see where the offer falls. If the company is promoting you into a role that pays $95,000 on the open market and you’re currently earning $80,000, a 10% bump to $88,000 still leaves you below market.
Switching Jobs Used to Pay More
Changing employers has long been the fastest way to get a significant raise, but the premium has shrunk. Workers who switched jobs in early 2025 saw median pay increases of about 4%, based on Bank of America Institute payroll data. The Atlanta Fed’s Wage Growth Tracker showed job switchers earning roughly 4.4% more, compared with 3.9% for employees who stayed put. That gap is much narrower than it was in 2022 and 2023, when job hoppers routinely landed 7% to 8% bumps or higher.
A job switch that nets you only 4% to 5% may not justify the disruption of starting over at a new company, losing tenure, resetting PTO accrual, and potentially dealing with a new vesting schedule on retirement contributions. If you’re considering a move purely for money, look for offers in the range of 10% to 20% above your current compensation. Below that, weigh the non-salary costs carefully.
Raises Vary by Industry
Not every sector pays the same increases. The technology industry, which led salary growth for years, is pulling back: planned pay increases for 2026 dropped by about half a percentage point compared to the prior year. Education and the food, beverage, and hospitality sector are budgeting below-average raises as well.
Meanwhile, wage growth reported by the BLS actually exceeds what employers are budgeting for base-pay increases in several industries, including finance and insurance, healthcare, manufacturing, and retail. That gap suggests workers in those fields may need to negotiate or switch roles to capture the full market rate, because their current employer’s raise budget may not keep pace with what the broader labor market is paying for similar work.
How to Judge Your Specific Raise
Context matters more than a single number. Use these benchmarks as a quick reference:
- Below 3%: Below average for a merit increase. If inflation is running above 2.5%, you’re losing ground.
- 3% to 4%: Average. You’re keeping pace with most workers and staying slightly ahead of inflation in a moderate environment.
- 4% to 6%: Above average for a merit raise with no title change. This typically reflects strong performance reviews or a market adjustment.
- 7% to 10%: Uncommon without a promotion or a significant shift in responsibilities. If you got this as a merit raise, your employer is making a retention play.
- 10% to 20%: Typical range for a meaningful promotion or a competitive external job offer.
The final piece is your own salary relative to market. A 5% raise on a salary that’s already 15% below market is still leaving money on the table. Before your next review or negotiation, check comparable roles in your area and industry using salary survey tools. Knowing your market value turns the conversation from “Is 4% good?” to “Does my total compensation reflect what this role is worth?”