November 4, 2025
So, is it secure so that you can assume you’ll get an computerized 3.5% bump in base wage subsequent 12 months? Not essentially. What occurs subsequent will differ primarily based on various components.
Everybody desires a pay elevate, however what are you able to realistically anticipate to get heading into 2026? The brief reply is, “it relies upon.” Nevertheless, if you happen to’re on the lookout for clues, a terrific place to start out is exploring projected benefit improve budgets for the 12 months forward.
New analysis from Pave, a compensation intelligence platform that collects real-time pay and workforce knowledge from hundreds of firms, signifies employers are gearing as much as dish out a median benefit improve funds of three.5% in the USA subsequent 12 months, which is on par with 2025.
This preliminary view of 2026 compensation planning practices comes after Pave and Alpine Rewards, a compensation consulting agency, teamed as much as survey 243 expertise and life sciences firms in September 2025 on their go-forward compensation budgets.
So, is it secure so that you can assume you’ll get an computerized 3.5% bump in base wage subsequent 12 months? Not essentially. What occurs subsequent will differ relying on a number of components.
Key Findings
- Heading into 2026, surveyed firms say they plan to order a median of three.5% of base payroll for benefit will increase within the U.S. subsequent 12 months.
- Corporations additionally plan to put aside further funds for pay will increase tied to promotions, pay fairness fixes, and different market-based changes.
- Pay will increase differ extensively primarily based on worker efficiency scores, indicating firms have gotten extra centered on pay for efficiency.
Total vs. Advantage Improve Budgets
Let’s begin with some excellent news. Corporations usually funds for pay will increase alongside two dimensions—they’ve an “general” wage improve funds and a “benefit” improve funds.
Total budgets embody benefit budgets and in addition put aside additional funds to pay for promotions, pay fairness fixes, and different market-based changes (e.g., a sudden improve in labor prices in a selected metropolis or nation). Within the Pave survey, firms indicated they plan to order a median of 5% of base payroll within the U.S. for his or her general budgets in 2026. This implies there may be extra to go round than you would possibly initially suppose.
Nevertheless, it’s vital to recollect these additional funds are designed to cowl particular conditions that won’t apply to most individuals. When managing your expectations, it’s best to concentrate on benefit improve budgets, that are supposed to cowl the overall worker inhabitants. And once more, the median projected benefit improve funds for 2026 within the U.S. is 3.5% of base payroll.
Your Efficiency Ranking Issues
Earlier this 12 months, Pave revealed a report on the connection between efficiency scores and annual wage will increase. Particularly, the report examined benefit cycle outcomes for 46,000 staff who acquired pay changes within the first quarter of 2025 within the U.S., who additionally had their efficiency score knowledge loaded into Pave’s compensation planning software program. Within the research, totally different efficiency score scales have been normalized throughout firms right into a three-tiered scale.
Workers with “meet expectations” efficiency scores acquired a wage improve 88% of the time, with a median elevate of three.5%. In different phrases, if you happen to meet expectations in your job, you’ll be able to typically anticipate a pay bump in step with projected benefit improve budgets. That stated, 12% of people that acquired a “meets expectations” score nonetheless received nothing, possible as a result of their firms confronted monetary difficulties and had a wage freeze in place.
The story is sort of totally different for workers who acquired “beneath expectations” scores. On this case, solely 10% of individuals received a elevate, and the median improve was 2.8%. On an general foundation, if you happen to fall into this class, you shouldn’t anticipate a lot.
On the prime of the efficiency scale, staff with “exceeds expectations” efficiency scores acquired a wage improve 89% of the time, and their median elevate was 5%. As extra firms proceed to search for methods to retain prime expertise and optimize their compensation spend, you’ll be able to anticipate extra {dollars} to circulate towards increased performers sooner or later.
Getting Promoted Modifications the Recreation
In the identical pay-for-performance report, Pave additionally explored outcomes for promoted staff. Everybody on this group acquired a wage improve, and their median elevate was 9.7%. If you’d like your pay to really outpace U.S. inflation—which stood at an annualized price of three% as of September 2025—setting your self up for a promotion is the ticket.
Of notice, 99% of promoted staff acquired new fairness grants (e.g., inventory choices or restricted inventory models) along with their base wage improve, offering an additional long-term bump in pay.
What’s Taking place Outdoors the US?
Within the Pave survey, firms have been additionally requested to share their projected general and benefit improve budgets outdoors the U.S. Curiously, the median projected benefit improve budgets in Australia, Canada, Germany, Eire, Poland, Switzerland, and the UK matched the U.S. precisely, coming in at 3.5%. In the meantime, the median projected benefit improve funds in Mexico is barely increased at 4%, and in India, the median is 8%. India is well-known for setting budgets no less than two occasions bigger than the U.S., however on an general foundation, this knowledge exhibits practices in most economies are converging.
Issues Can Nonetheless Change
Whereas new knowledge from Pave suggests staff can anticipate to see pay will increase in 2026 which can be just like 2025, we’re nonetheless months away from most benefit cycles, which generally happen in March and April. This implies rather a lot might nonetheless change earlier than firms take motion on pay changes. If macroeconomic situations bitter, you’ll be able to anticipate precise benefit improve budgets to shrink between now and subsequent spring. Nevertheless, in the intervening time, firms seem set for a business-as-usual method.
This story was produced by Pave and reviewed and distributed by Stacker.
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