Average Raise Percentage by Industry in 2024

The National Average: 4.1% in 2024

According to recent compensation surveys, the average salary increase for 2024 is hovering around 4.1% for merit raises. That's up slightly from 3.8% in 2023, driven by continued competition for talent and persistent inflation concerns.

But that number doesn't tell the whole story. Your industry, job level, and performance rating create massive variation in what you should actually expect.

Average Raises by Industry

Here's what employers are budgeting for raises across major sectors:

Why Tech Leads the Pack

Technology companies are still paying the highest raises for a few reasons:

• Talent competition remains fierce — especially for AI/ML engineers, senior software developers, and product managers
• High profit margins — software businesses can afford to pay more without impacting bottom line
• Remote work expanded the talent pool — companies compete globally now, driving up compensation
• Retention is critical — replacing a senior engineer costs 6-9 months of salary in recruiting and ramp-up time

If you're in tech and got less than 5%, you're likely below market unless there were company-wide budget constraints.

Performance Rating Multipliers

Most companies use a performance-based merit matrix. Here's how your rating impacts your raise:

This means in a company with a 4% average budget, top performers might see 7-9% while average performers get 3-4%.

Job Level Matters Too

Your position in the org chart affects raise expectations:

Individual Contributors (IC)

• Junior (0-2 years): 4-7% merit raises, faster if underpaid initially
• Mid-level (3-6 years): 3-5% annual, 10-15% on promotion
• Senior (7+ years): 3-4% annual, 15-20% on promotion to staff/principal

Management Track

• First-time manager: 10-15% bump on promotion
• Manager: 4-6% annual merit
• Senior Manager / Director: 3-5% annual, 15-25% on promotion to VP
• VP / C-Suite: 3-5% base (total comp includes equity/bonuses)

Geographic Variations

Location still impacts raises despite remote work becoming common:

• High-cost metros (SF, NYC, Seattle): +0.5-1.5% above industry average
• Mid-tier cities (Austin, Denver, Boston): Aligned with national averages
• Lower-cost regions: Often 0.5-1% below national average

Remote positions are increasingly pegged to national averages rather than local markets, which can work for or against you depending on where you live.

COLA vs Merit Increases

Some companies split raises into two buckets:

1. Cost of Living Adjustment (COLA): 2-3% given to everyone to keep pace with inflation
2. Merit Increase: Additional 1-5% based on performance

If your company does this, a "4% raise" might actually be a 2% COLA + 2% merit, meaning you're an average performer. Ask your manager which structure your company uses.

What If Your Raise Is Below Average?

Got a 2% raise when your industry average is 4%? Here's what might be happening:

• Company financial challenges — check if raises were suppressed company-wide
• You're overpaid for your level — compensation typically "catches up" over time if you were hired high
• Performance concerns — if you got "meets expectations" but a low raise, something's off
• Budget allocated elsewhere — maybe you got a big promotion raise last year

If none of these apply, it might be time to have a direct conversation with your manager about compensation philosophy and what it would take to get back to market rate.

When to Job Hop Instead

Here's a hard truth: the fastest way to get a big raise is often changing companies. While internal raises average 3-5%, external moves typically yield 10-20% bumps (sometimes more in hot markets).

Consider looking externally if:

• Your raises have been below 3% for two consecutive years
• Comparable market salaries are 15%+ higher than yours
• You've been promoted without meaningful compensation increases
• Your company has frozen or capped merit budgets

How to Use This Data

Knowing industry averages helps you:

1. Set realistic expectations — if you're in education, a 6% raise is exceptional; in tech, it's good but not extraordinary
2. Prepare negotiation talking points — "Industry data shows 5.2% average for tech roles"
3. Evaluate job offers — a 3% annual raise cadence means different things in different industries
4. Plan your career financially — understanding typical trajectories helps with long-term budgeting

Calculate Your Raise

Want to see how your specific situation stacks up? Use our pay raise calculator to model different scenarios and see exactly how industry-standard raises would impact your take-home pay over time.

Remember: these are averages. Your personal value, performance, and negotiation skills create significant variance around these numbers. Always advocate for yourself based on your actual contributions, not just industry benchmarks.