2027 Raise Budgets Are About 3.5%: How to Get More Than the Average

US employers are planning 2027 salary increase budgets of about 3.5%, roughly the same as 2026, according to the major pay surveys published this summer. That figure is an average pool, not a promise: the typical employer budgets at or below it, and a growing share goes to top performers and hard-to-fill roles rather than to everyone equally. To get more than the average, make your case before your employer allocates the budget, which at many companies happens this fall, and ask for the right kind of increase: merit, promotion, or a market adjustment.

What the 2027 salary surveys say

Several of the large compensation surveys that employers use to set pay have released their 2027 projections, and they agree closely.

• WorldatWork reports a projected US mean salary increase budget of 3.6% for 2027, the same as the 2026 actual. The survey ran from March to May 2026 and covered 1,799 organizations (WorldatWork, July 2026).
• WTW projects 3.4% for US employers in 2027, down slightly from an actual 3.5% in 2026. Gallagher puts its range at 3.0% to 3.5% (SHRM, August 2026).
• Mercer, surveying just over 1,000 employers in July 2026, found a projected merit budget of 3.2% and a total increase budget of 3.5%, a figure that includes employees who get no increase at all. Employers also expect to move their formal salary ranges up by an average of 2.6% and to promote about 8.4% of their workforce (Mercer, August 2026).

The headline is stability. Mercer describes this as the fourth year of consistently sized budgets, which is a long way from the unusually large raises of the post-pandemic hiring rush. If you have been waiting for pay budgets to open up again, the surveys give no sign that 2027 is the year.

What an "average raise" actually means for you

A 3.5% budget does not mean you will get 3.5%. It is the size of the pool a company sets aside, expressed as a percentage of total payroll, and managers then split that pool among their people. Three details in this year's data matter for how the split works.

The average is pulled up by a minority

WorldatWork notes that a small group of organizations with large budgets holds the averages up, while the typical organization budgets at or below the average. If your employer is a typical one, the realistic starting point for an ordinary raise is a little under the headline number, not at it.

Zeros are included

Mercer's total budget includes people who receive no increase. When some employees get nothing, the money that would have gone to them is available for others. That is one reason the same pool can produce a 2% raise for one person and a 6% raise for another on the same team.

Differentiation is the trend

The survey firms describe employers moving away from broad, across-the-board increases and toward targeted merit raises for top performers and people in critical roles. For you, this cuts both ways. Being seen as an average performer in an average role is likely to mean a below-headline raise. Being clearly visible as a high performer, or working in a role the company struggles to fill, is how people end up at the top of the range.

Why timing matters more than usual this year

When budgets are flat, the fight is over how the pool is divided, and the division is largely decided before most employees ask. At companies that run a calendar-year pay cycle, budgets are typically approved in the fall, managers propose individual increases in late fall or early in the new year, and the raise shows up in the first quarter. By the time your review conversation happens, your number may already be set.

So the useful time to make your case is before your manager fills in the spreadsheet. If your company's cycle follows that pattern, that means the next few weeks. Ask your manager directly how the process works and when recommendations are due. It is a reasonable question, and the answer tells you your deadline. If your employer's cycle runs on a fiscal year or on your hire anniversary, work back from that date instead.

Three kinds of increase, and which to ask for

Most people ask for "a raise." You will do better if you ask for the specific type of increase that fits your situation, because each one usually comes out of a different budget and needs a different argument.

A merit increase

This is the annual raise tied to performance, and it is where most of the pool goes. Your case is your results over the past year: what you delivered, what it was worth to the team or company, and what you took on beyond your role. Our guide on how to ask for a raise covers how to structure that conversation. Write your results down in the same form as strong resume bullets, with the action, the scope, and the outcome, so your manager can copy them straight into the justification they have to write.

A promotion increase

Promotions are often funded separately from the merit pool, and they usually carry a larger increase than an annual raise. If you are already doing work at the next level, asking for the promotion can get you more than pushing for a bigger merit raise. Mercer's figure of about 8.4% of employees being promoted gives a sense of how selective this is. Our guide to negotiating salary for a promotion covers the ask.

A market adjustment

Salary ranges themselves are moving up, by about 2.6% on average according to Mercer. If your pay has fallen behind what the market now pays for your role, the argument is not about performance at all: it is that your salary is below the going rate. Build that case with real market data; our guide to researching your market salary explains where to find reliable figures. In states with pay-transparency laws, posted ranges for similar roles are an easy place to start.

Is switching jobs the better route?

A new job is not bound by your current employer's merit pool, which is why moving has historically been the fastest way to raise pay. That advantage has narrowed. Our analysis of whether switching jobs is still worth it in 2026 covers the smaller gap between job-changers and job-stayers. With raise budgets flat and the market improving only slowly, the sensible approach for most people is to ask properly first, and to treat an outside search as a real option if the answer falls short, not as a threat to bluff with.

If you do look, remember that offers are negotiated against the market, not against a 3.5% pool. The number you bring into a negotiation should come from what the role pays, and base pay is only one lever; our guide on what to negotiate besides salary covers the rest.

A short checklist for the next few weeks

• Find out when your employer sets raises and when your manager's recommendations are due.
• Write down your three to five strongest results from the past year, each with a clear outcome.
• Decide which increase you are asking for: merit, promotion, or market adjustment.
• Gather market pay data for your role and location if you think you are underpaid.
• Have the conversation before recommendations are due, and follow up in writing with a short summary.
• Check your raise against the latest inflation figures from the Bureau of Labor Statistics, so you know whether it is a real increase or only keeps you level.
• Update your resume now, while your results are fresh, whether or not you plan to use it.

The survey figures are projections from mid-2026, and employers can revise budgets if the economy shifts; our note on this month's Fed rate hike covers one factor that could change the picture. This post is general information, not personalized financial advice. What will not change is how the pool works: it is fixed, it is divided early, and the people who make a specific, well-evidenced case at the right time get the larger share.