What Is a Good Salary Raise? Average Raise Percentages Explained

Direct Answer

A good salary raise depends on the reason for the increase, your industry, and current market conditions. In general, a 3% to 5% raise is considered a typical annual merit increase, while promotion raises often range from 5% to 15%. Employees who change jobs may receive salary increases of 10% to 25% or more.

There's no single number that qualifies as "good" for everyone, because a raise that feels generous in one context can feel disappointing in another. A 4% raise during a year of flat inflation represents real income growth. That same 4% raise during a year of 6% inflation is technically a pay cut in purchasing power, even though the number on your paycheck went up. Context always matters more than the raw percentage.

This guide breaks down what counts as a good raise across different situations, how inflation quietly changes the math, and how to figure out what you should realistically be asking for.

Why "Good" Depends on Where the Raise Is Coming From

Before comparing percentages, it helps to separate raises by their source, because the same number means something different depending on where it comes from.

A raise from an internal annual review is usually constrained by a company-wide budget for raises that year, often set well before your individual performance is even evaluated. A raise from a promotion typically has more room to move, since it's tied to a specific change in role rather than a fixed annual pool. A raise from switching employers entirely operates under a different logic altogether — you're being priced against the external market rather than your internal pay history, which is a large part of why job-change raises tend to run so much higher than internal ones.

Understanding which category a raise falls into helps you judge it more accurately. A 4% internal merit raise might be near the top of what your company typically offers in a given cycle, while a 4% raise attached to a job change would likely be considered low relative to market norms for that same move.

What Is Considered a Good Salary Raise?

Raises generally fall into a few recognizable categories, each with its own typical range and purpose.

Cost-of-Living Raise: 2%–4%

The purpose of a cost-of-living raise is to keep up with inflation and maintain your existing purchasing power. It's not meant to reward performance — it's meant to keep your real income roughly flat as prices rise. Many companies apply this type of adjustment broadly, across most or all employees, regardless of individual performance.

Merit Raise: 3%–5%

A merit raise rewards performance during a standard review cycle. It's the most common type of raise tied to an annual review, and it typically goes beyond a pure cost-of-living adjustment, since it reflects how you actually performed rather than just rising costs.

Promotion Raise: 5%–15%

When a raise comes bundled with new responsibilities or a title change, employers generally offer more to reflect the increased scope of the role. A promotion raise compensates for both the added work and the higher level of accountability that usually comes with it.

Job Change Raise: 10%–25%+

Moving to a new employer often produces the largest single jump, since it lets you negotiate from outside your current pay history and leverage current market demand for your skills. Employers hiring externally are often working with a different budget logic than the one used for internal raises, which is part of why job-change raises tend to run higher.

Average Salary Raise by Scenario

Here's a quick reference for how these categories typically compare:

Situation	Typical Raise
Cost of Living	2%–4%
Merit Increase	3%–5%
Promotion	5%–15%
New Employer	10%–25%+
High-Demand Skills	15%–30%+

The high-demand skills category deserves a note: it's less about the type of raise and more about leverage. Someone with a skill set in short supply relative to demand — a specific technical specialization, a scarce certification, or experience in a fast-growing niche — can often command raises above what their role or title alone would typically suggest, in any of the other categories.

3% vs 5% vs 10% Raise Comparison

Seeing these percentages applied to the same salary makes the differences concrete rather than abstract.

Current Salary: $60,000

Raise	Increase	New Salary
3%	$1,800	$61,800
5%	$3,000	$63,000
10%	$6,000	$66,000

Small differences in percentage create significant long-term income differences. The jump from 3% to 5% doesn't look dramatic in a single year — it's an extra $1,200 — but that difference compounds every year going forward, since each future raise is calculated on an already-higher base. Over a decade, a consistent 2 percentage point gap between two raise rates can add up to a meaningfully larger total salary, not just a slightly bigger one.

Is a 3% Raise Good?

Yes, if:

Inflation is low
It's part of a standard annual review cycle
You're in a stable industry with limited turnover pressure

Maybe not, if:

Inflation exceeds 3%, which erodes the real value of the raise
Your responsibilities have increased significantly without the raise reflecting that
Market rates for your role have risen substantially since your last adjustment

A 3% raise isn't inherently bad — it's the most common baseline for a standard, uneventful review cycle. The context around it is what determines whether it actually represents growth or just keeps you treading water.

Is a 5% Raise Good?

Generally considered good.

Benefits:

Above-average annual increase compared to the typical 3% baseline
Often indicates strong performance recognized by your employer
Provides real income growth even in years with moderate inflation

A 5% raise sits comfortably above the standard merit range, which is usually a sign that your employer is specifically rewarding above-average performance, not just applying a standard cost-of-living bump across the board.

Is a 10% Raise Good?

Usually excellent.

Common reasons a raise reaches this level:

A promotion with meaningfully expanded responsibilities
A retention effort, where an employer is trying to prevent you from leaving
A competitive job market driving up pay for your specific role
A high-value skill set that's currently in short supply

A 10% raise, outside of a job change, is uncommon enough that it usually signals something specific is happening — either a structural change in your role, or a deliberate effort by your employer to keep you from looking elsewhere.

How Inflation Affects Salary Raises

A raise percentage only tells part of the story. What actually matters for your day-to-day spending power is the raise relative to inflation during the same period.

Example:

Salary Raise = 3% Inflation = 4%

Result:

Real Income Growth = -1%

In this scenario, even though your paycheck technically increased, your purchasing power actually declined, because prices rose faster than your pay did. This is one of the most overlooked aspects of evaluating a raise: a raise that looks positive in nominal terms can still represent a real-world pay cut once inflation is factored in.

This is why it's worth checking the current inflation rate whenever you're evaluating whether a raise offer is genuinely fair, rather than judging the percentage in isolation. A 3% raise during a low-inflation year can represent solid real growth, while the same 3% raise during a high-inflation year barely keeps you even.

A few scenarios illustrate this clearly:

Raise	Inflation	Real Income Change
5%	2%	+3% (real growth)
3%	3%	0% (flat purchasing power)
3%	5%	-2% (real pay cut)
8%	4%	+4% (real growth)

The same nominal raise percentage can represent genuine growth, a standstill, or an effective pay cut depending entirely on what inflation is doing that year. This is also why it's worth revisiting raise expectations periodically rather than anchoring to a single "standard" number indefinitely — a 3% raise that felt fair during a low-inflation stretch may need to be renegotiated upward during a higher-inflation period just to maintain the same real standard of living.

How Much Raise Should You Ask For?

The right number to ask for depends heavily on the situation you're in.

Annual Review: 3%–7%

Promotion: 10%–20%

Job Change: 15%–30%

Factors that shift where you should land within these ranges:

Experience — more years of relevant, demonstrated experience generally supports a higher ask
Performance — measurable results and completed projects strengthen your case significantly
Market demand — how sought-after your specific skill set currently is
Industry — some industries have more room for movement than others, based on typical margins and growth

These ranges are starting points, not guarantees. The stronger your evidence — measurable results, market data, or a competing offer — the more confidently you can ask toward the higher end of the relevant range.

Signs You Deserve a Bigger Raise

A few patterns are worth watching for, since they often indicate your compensation has fallen behind what your role or performance actually justifies.

Sign 1: Responsibilities increased significantly.

If your day-to-day role looks meaningfully different from what you were originally hired to do, your pay should reflect that shift, even without a formal title change.

Sign 2: You consistently exceed performance goals.

Repeatedly hitting or surpassing targets is one of the clearest, most defensible pieces of evidence you can bring into a raise conversation.

Sign 3: Market salary is substantially higher.

If reliable salary data shows your current pay sitting well below the market range for your role, experience, and location, that gap is a strong, objective argument for an adjustment.

Sign 4: You obtained valuable certifications or skills.

New credentials or capabilities that directly benefit your employer are a reasonable basis for revisiting your compensation, particularly if they weren't factored into your original pay.

Sign 5: You have competing job offers.

A legitimate offer from another employer is concrete evidence of your market value, and it often prompts a faster, more serious response than a request without that backing.

Long-Term Impact of Raises

Raises rarely happen just once — most people receive some form of increase every year, and those increases compound rather than simply adding up.

Starting Salary: $50,000

Annual Raise: 3%

After 5 years: ≈ $57,964

This number is higher than the simple estimate you'd get by just adding 15% (five years of 3%) directly to the starting salary, because each year's raise is calculated on top of an already-larger base, not the original $50,000. This compounding effect is small in any single year but becomes significant over a longer career, especially when comparing two similar-looking raise percentages over a decade or more.

If you want to see how your own salary would grow under different raise scenarios over multiple years, a raise compounding calculator can run the year-by-year math instantly, rather than requiring you to calculate each year by hand.

Use Our Raise Calculator

Understanding raise ranges is useful, but seeing the exact dollar impact on your own salary makes the numbers concrete.

Try the Raise Calculator →

With the calculator, you can quickly work out:

Raise amount — the dollar value of a specific percentage increase
New salary — your updated annual pay after the raise
Monthly increase — how the raise changes your actual monthly paycheck
Annual increase — the total additional income over a full year

It's a fast way to check whether an offered raise is actually competitive, or to model out a specific number before walking into a negotiation.

Common Mistakes When Judging a Raise

A few recurring errors make raises look better or worse than they actually are.

Comparing your raise to a coworker's without knowing the full context. A coworker's larger raise might reflect a promotion, a market correction after being underpaid, or a role change you're not fully aware of. Percentage alone, without context, is a misleading comparison.

Judging a raise in isolation from your total compensation. A modest salary raise paired with an improved bonus structure, added equity, or a stronger benefits package can add up to more total value than a larger raise with no other changes. It's worth looking at the full package, not just the base salary line.

Assuming last year's raise percentage sets the standard for this year. Market conditions, inflation, and company performance shift year to year. A raise that matched market rate two years ago might now be below it, even if the percentage itself hasn't changed.

Forgetting that raises are easier to negotiate before they're finalized. Once a raise percentage is set and communicated, there's often little room left to adjust it for that cycle. Raising concerns or additional context earlier in the review process, before numbers are locked in, generally gives you more flexibility than trying to renegotiate afterward.

Related Career Tools

Salary Raise Comparison Table by Income

Use this table to quickly check what a 3%, 5%, or 10% raise looks like at common salary levels, without doing the math yourself.

Current Salary	3% Raise	5% Raise	10% Raise
$40,000	$41,200	$42,000	$44,000
$50,000	$51,500	$52,500	$55,000
$75,000	$77,250	$78,750	$82,500
$100,000	$103,000	$105,000	$110,000

If your exact salary isn't listed, the raise calculator can run the same math instantly for any starting salary and percentage.

Frequently Asked Questions

What is considered a good salary raise?

A good salary raise is typically between 3% and 5% for annual performance reviews, while promotions often result in raises of 5% to 15%.

Is a 3% raise good?

A 3% raise is generally considered a standard annual increase and may help maintain purchasing power depending on inflation.

Is a 5% raise good?

Yes. A 5% raise is usually above average and often reflects strong performance.

Is a 10% raise good?

A 10% raise is considered excellent and is commonly associated with promotions or job changes.

How much raise should I ask for?

The appropriate raise depends on performance, market conditions, and role changes, but many employees target 3%–7% during annual reviews and higher percentages for promotions or job changes.