If you were expecting a massive windfall this year, I've got some news that might sting a little. The average raise percentage 2025 is hovering right around 3.9% to 4.1% across most major U.S. industries. That’s it. It’s not the "Great Resignation" peak we saw a few years back, but it’s also not a total disaster compared to historical norms.
Paychecks are weird right now.
You’ve probably noticed that while inflation has cooled off from those terrifying 9% peaks, everything still feels expensive. Employers know this. They're trying to balance keeping their best people without blowing up their operating budgets. Most of the data coming from places like WTW (formerly Willis Towers Watson) and the Conference Board suggests that companies are being a bit more conservative than they were in 2023. Back then, we saw raises hitting 4.4% or higher because everyone was terrified of losing talent. Now? The power dynamic is shifting back toward the bosses.
The Reality of the Average Raise Percentage 2025
Let's look at the actual numbers.
When we talk about the average raise percentage 2025, we aren't just talking about a single number for everyone. It's a range. If you’re a "meets expectations" kind of worker, you’re likely looking at that 3.5% mark. If you're the person holding the entire department together with duct tape and sheer will, you might see 5% or 6%. But the days of 10% "stay-put" raises are mostly gone unless you’re in a very specific niche like AI development or specialized healthcare.
According to the WTW Salary Budget Planning Survey, about 38% of employers are planning for smaller increase budgets than they had last year. Why? Because the labor market is "stabilizing." That’s corporate-speak for "people aren't quitting as much, so we don't have to pay as much to keep them." It’s frustrating, honestly. You work harder, things get more expensive, and the reward is a percentage that barely covers the increase in your car insurance premium.
Different Industries, Different Rules
Don't assume everyone is getting the same slice of the pie.
Tech is still a bit of a roller coaster. After the massive layoffs of 2023 and 2024, many tech firms are keeping raises lean. They’re focused on profitability now, not just growth at all costs. On the flip side, if you're in manufacturing or healthcare, you might see slightly higher bumps. Nurses and skilled tradespeople are still in short supply, which gives them more leverage when the average raise percentage 2025 is being calculated at the board level.
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One thing that’s really interesting—and kinda annoying—is how much geography still matters. Even with remote work being a thing, if you’re in a high-cost-of-living area like San Francisco or NYC, your "average" might be 4.5%, whereas someone in a smaller Midwestern town might see 3.2%. The gap is closing, sure, but it hasn't disappeared.
Why Your Boss is Being Stingy (Even if Profits are Up)
It's easy to get mad at the CEO, and sometimes, you should. But there’s a broader economic narrative here.
Most companies are bracing for a "soft landing" or a mild stagnation. They are terrified of wage-price spirals. That’s the economic theory where higher wages lead to higher prices, which leads back to higher wages, and suddenly a loaf of bread costs twenty bucks. To prevent this, HR departments use "benchmarking." They look at what their competitors are doing and try to stay right in the middle. If everyone else is offering a 4% average raise percentage 2025, your company isn't going to suddenly offer 8% out of the goodness of their hearts.
Also, keep an eye on "total compensation."
Since they can't always give huge salary bumps, some companies are getting creative. Maybe it’s a better 401(k) match. Maybe it’s more "wellness days" or subsidized childcare. Honestly, sometimes these are just cheap ways to avoid paying you more cash, but in a tight year, you have to look at the whole package. If your base salary only goes up 3% but your health insurance premiums don't rise, that’s a win in this economy.
Breaking Down the 4% Myth
There's this idea that 4% is the magic number. It's not.
In reality, many companies are moving toward "merit-only" pools. This means if you have ten people on a team, the company might allocate a 4% total increase for the whole group. If one person gets 7%, someone else is probably getting 1%. It’s a zero-sum game that creates a lot of tension.
Pay transparency laws are changing the game, though. In states like California, New York, and Colorado, companies have to post salary ranges. This is making it harder for bosses to lowball current employees when they see what new hires are making. If you find out the new guy is making 15% more than you, that "average" raise isn't going to cut it. You have to use that data.
The Impact of AI on Wages
We have to talk about AI. It's the elephant in every room.
In 2025, we’re starting to see a "productivity gap." Companies are starting to ask: "If AI makes you 20% more efficient, do we owe you a 20% raise, or is that our profit because we provided the tool?" It’s a messy debate. For now, it seems like people who can use AI to do more are the ones securing the higher end of the average raise percentage 2025. If you’re just doing the same old thing, your leverage is shrinking.
How to Beat the Average
If you want to beat the average raise percentage 2025, you can't just wait for your annual review. You'll lose.
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You need to document everything. I'm talking about a "win list." Every time you saved the company money, every time you solved a problem that would have cost thousands, write it down. When you sit down with your manager, don't talk about how your rent went up. They don't care. Talk about your "market value."
Reference the Bureau of Labor Statistics (BLS) data. Look at real-time sites like Payscale or Glassdoor, but take them with a grain of salt because they can be outdated. The most powerful tool you have is a competing offer. It’s risky, yeah. But in a year where raises are hovering around 4%, the only way to get a 15% or 20% jump is usually to leave or have one foot out the door.
The "Cost of Labor" vs. "Cost of Living"
This is the biggest point of confusion.
Your boss doesn't pay you based on the cost of your groceries. They pay you based on the cost of replacing you. This is the "Cost of Labor." Even if inflation is 5%, if the market for your job is flooded with candidates, your raise might be 2%. It feels unfair because it is. Understanding this distinction is crucial for your mental health and your negotiation strategy.
Actionable Steps to Maximize Your 2025 Earnings
Forget the generic advice. Here is what you actually need to do to navigate the average raise percentage 2025 environment:
Audit your internal standing. Ask for a "pre-review" three months before your actual anniversary. Ask your manager directly: "What would it take for me to be in the top 10% of raises this year?" If they can't give you a straight answer, they probably haven't fought for a bigger budget.
Look at your "Total Rewards" statement. Most big companies give you a document that shows the value of your insurance, 401(k) match, and perks. If your cash raise is low, negotiate for things that cost them less but save you more—like a permanent remote work arrangement or a certification paid for by the company.
Shift your focus to high-impact projects. In a 4% raise environment, visibility is everything. If you're working on "maintenance" tasks, you're invisible. Get on the project that the VP is watching. That’s where the "discretionary" bonus money lives.
Don't ignore the "Promotion Raise." The average raise percentage 2025 for a lateral move (staying in your same job) is small. The raise for a promotion is usually 8% to 12%. If you’ve been in your role for two years, stop asking for a raise and start asking for a title change. It’s a different bucket of money in the HR budget.
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Verify the data. Use sources like Mercer’s US Compensation Planning Survey. They provide granular details on how different sectors are behaving. If your company says "nobody is getting more than 3%," and you have data showing your industry average is 4.2%, you have a much stronger case for a correction.
The 2025 landscape is one of cautious stability. Companies aren't panicked, so they aren't overpaying. This means the burden of proof is on you. If you go into your review expecting the company to "do the right thing," you’ll likely end up with 3.8% and a pat on the back. To get more, you have to prove you’re the exception to the average.