For those who’re hoping for an enormous pay elevate this yr, current information suggests you may wish to test these expectations. Pay raises in 2026 are holding regular reasonably than surging, in response to analysis from Payscale.
The findings come from Payscale’s 2026 Compensation Finest Practices Report, which surveys organizations concerning the wage will increase they distributed in 2025 and what they plan for this yr. The info offers an image of the place employer pay budgets stand amid ongoing financial uncertainty.
The numbers aren’t shifting a lot
The median base pay enhance for 2026 sits at 3.5%, an identical to what employers gave in 2025. For staff who have been anticipating raises to outpace inflation extra aggressively, that’s doubtless a little bit of a letdown.
There are some variations between Canadian and American wage will increase, in response to 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 price, which held regular at 2.2% in November 2025. By comparability, U.S. inflation was operating at roughly 2.7% yearly as of late 2025.
As for what drives raises, advantage and efficiency stay the dominant components, 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 choices.
The rise of ‘peanut butter’ raises
One rising pattern in pay is across-the-board wage will increase. They’re typically referred to as “peanut butter raises” as a result of they unfold pay will increase evenly reasonably than tying them to particular person efficiency rankings.
Based on Payscale’s information, 48% of organizations plan to proceed performance-based pay will increase, however a good portion are reconsidering that method.
About 18% are contemplating peanut butter will increase, 16% are planning to implement them and 9% already use this methodology. In whole, 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 liable to bias. Organizations with massive frontline or lower-wage workforces could discover uniform will increase less complicated to manage and clarify to workers.
Employers really feel assured concerning flat budgets
Regardless of the dearth of motion in wage budgets, most employers appear snug with their compensation methods. About 60% consider their 2026 wage will increase are aggressive sufficient to retain and have interaction expertise.
That confidence seems to stem from having higher information to again up pay choices. Organizations that may clarify their compensation selections utilizing market data appear safer of their method, even when budgets aren’t rising.
For staff, the message is that vital pay jumps in all probability aren’t coming via annual raises alone. These seeking to enhance their revenue may have to think about different methods, akin to pursuing promotions, growing new expertise or exploring alternatives elsewhere.
