What's the average raise in 2026 — and is yours actually competitive?

The short answer: the average US merit raise budget in 2026 is approximately 3.8% (SHRM, Mercer, WTW all cluster around this number). Headline inflation is running around 3.0%, so the average worker is seeing a ~0.8% real raise — basically treading water.

But the average hides everything interesting. Here's what you actually need to know.

By industry (2026 medians)

• Technology: 4.2% (down from 4.8% in the 2021-2022 hot years, back toward pre-pandemic baseline)
• Financial services: 4.0%
• Healthcare: 4.1% (driven by clinical staff shortages)
• Retail & hospitality: 3.5%
• Manufacturing: 3.6%
• Government / public sector: 3.0-3.5%
• Nonprofit: 3.0%

If you're in a high-growth sub-segment (AI, cybersecurity, GLP-1-adjacent healthcare), add 1-2 points.

By performance rating

This is where most people miss the story. Your "merit pool" (the 3.8% average) is distributed unevenly:

• Top performers (top 10-15%): 5.5-7.5%
• High performers (next 15-20%): 4.5-5.5%
• Meets expectations (middle 50-60%): 3.0-4.0%
• Below expectations (bottom 10-15%): 0-2% or none

If you believe you're in the top 20% of performers and you got a 3.5% raise, your manager either disagrees with your self-assessment or isn't fighting for you. Both are worth clarifying directly.

Promotion vs merit raise

A merit raise happens at annual review time and averages 3-5%. A promotion-level raise happens when you change titles or scope and should be 8-20%, depending on the jump.

If you were promoted in the same cycle and your increase was only in the merit range (3-5%), you were under-leveled on the promotion itself. Ask about it.

Cost-of-living adjustments (COLA)

COLAs are usually tied to CPI and happen automatically. In 2026 that's about 3.0%. Your merit raise should be ON TOP of COLA in most structured compensation systems — but at many companies, the "raise" they tell you about IS the COLA and there's no separate merit component. You have to ask.

Questions to get clarity:

• "Is this raise a merit increase or a cost-of-living adjustment?"
• "Was there a separate COLA this cycle?"
• "What percentile of the merit pool does this put me in?"

What "competitive" actually means in 2026

A competitive raise has all four of these:

1. Beats inflation by at least 1% (so ≥ 4.0% in 2026)
2. Meets or exceeds your industry median (see table above)
3. Keeps you within 10% of the market rate for your role / level / location
4. Reflects your performance tier — top performers should be clearly rewarded

If any of the four is missing, you have a conversation to have.

The 30-second check

We built RaiseCheck to run all four of these checks against your specific numbers. Input your salary, raise, industry, location, and experience — you get an inflation-adjusted "real raise," a market-rate range, a peer-level comparison, and a 4-sentence negotiation script that uses your actual numbers. $9.99, one-time, no account, no subscription.