In case you’re hoping for an enormous pay elevate this yr, current knowledge suggests you would possibly wish to verify these expectations. Pay raises in 2026 are holding regular quite than surging, in accordance with analysis from Payscale.
The findings come from Payscale’s 2026 Compensation Greatest Practices Report, which surveys organizations concerning the wage will increase they distributed in 2025 and what they plan for this yr. The information offers an image of the place employer pay budgets stand amid ongoing financial uncertainty.
The numbers aren’t transferring a lot
The median base pay enhance for 2026 sits at 3.5%, equivalent to what employers gave in 2025. For employees who had been anticipating raises to outpace inflation extra aggressively, that’s seemingly a little bit of a letdown.
There are some variations between Canadian and American wage will increase, in accordance with the report. Whereas U.S. employers are planning median will increase of three.5%, Canadian organizations are projecting barely decrease raises at 3.2%.
Nonetheless, Canadian will increase are literally greater relative to that nation’s inflation fee, which held regular at 2.2% in November 2025. By comparability, U.S. inflation was working at roughly 2.7% yearly as of late 2025.
As for what drives raises, benefit and efficiency stay the dominant elements, with 76% of organizations citing them as essentially the most influential drivers of pay will increase.
Market changes to remain aggressive with the price of labor got here in second at 46%. About 45% of organizations additionally issue value of dwelling into their selections.
The rise of ‘peanut butter’ raises
One rising development in pay is across-the-board wage will increase. They’re generally referred to as “peanut butter raises” as a result of they unfold pay will increase evenly quite than tying them to particular person efficiency scores.
In accordance with Payscale’s knowledge, 48% of organizations plan to proceed performance-based pay will increase, however a good portion are reconsidering that strategy.
About 18% are contemplating peanut butter will increase, 16% are planning to implement them and 9% already use this technique. In complete, greater than 40% of organizations are both utilizing or actively contemplating standardized raises.
This might mirror a shift away from performance-based techniques, which have confronted criticism for being subjective and doubtlessly vulnerable to bias. Organizations with massive frontline or lower-wage workforces might discover uniform will increase easier to manage and clarify to staff.
Employers really feel assured concerning flat budgets
Regardless of the shortage of motion in wage budgets, most employers appear snug with their compensation methods. About 60% imagine their 2026 wage will increase are aggressive sufficient to retain and interact expertise.
That confidence seems to stem from having higher knowledge to again up pay selections. Organizations that may clarify their compensation decisions utilizing market info appear safer of their strategy, even when budgets aren’t rising.
For employees, the message is that important pay jumps in all probability aren’t coming by way of annual raises alone. These seeking to enhance their revenue might have to think about different methods, equivalent to pursuing promotions, growing new abilities or exploring alternatives elsewhere.
