How much to ask for a raise in 2023?
The tricky part is figuring out how much to ask for. The U.S. inflation rate was posted at about 6.4% year-over-year as of January 2023, per the latest CPI data. The obvious solution is to ask for a pay raise of 6.5% or so to at least stay even with inflation, but that's not always the best strategy, experts say.
What is the appropriate salary raise in 2023? Most companies have budgeted for 3% annual pay raises over the last decade, and most information suggests this trend will continue. This is true for salaried, hourly and executive worker categories.
It's always a good idea to ask for anywhere between 10% to 20% higher than what you're making right now. You may be able to ask for more based on your performance, length of time with the company, and other factors. Make sure you come prepared when you negotiate your raise and be confident.
For 2023, the COLA increase is 8.7%, which is significantly larger than the COLAs in recent years.
The average raise is a little above 3 percent, with solid raises falling between 4.5 and 5 percent. However, you could ask for as much as a 10- to 20-percent raise, depending on your performance and impact on the company.
On paper, Americans have to see a 3.2 percent raise or more to beat inflation, according to the latest figures from the consumer price index (CPI).
How much should you ask for? The average pay raise is 3%. A good pay raise ranges from 4.5% to 5%, and anything more than that is considered exceptional. Depending on the reasons you cite for a pay raise and the length of time that has passed since your last raise, you could request a raise in the 10% to 20% range.
How much should my salary increase each year? Your salary should increase by at least 3-5% per year. While annual raises vary a lot depending on your circ*mstance, a raise of at least 5% is more than adequate. Anything above that would be considered higher than average.
Anything lower than 1% that isn't contractually laid out- it's pretty common for unions to negotiate small, but consistent raises like 50 cents every six months, for example- is an insult.
- "I Deserve a Raise Because I Have Been Here 'X' Amount of Years." ...
- "I Feel That…" ...
- "X Is Making More than Me." ...
- "I'm Overdue for a Raise." ...
- "I Will Leave if I Don't Receive a Raise of X Amount."
How much should my salary increase each year?
In essence, a 3% salary increase is the norm across most industries. So, as you set your sights on a salary boost in 2024, especially if 2023 was disappointing, this is a realistic figure to aim for.
How Long Should You Work Without A Raise? Every worker is different but most find that they should expect a raise every 1-2 years. However, comparing your salary against those of your coworkers and industry as a whole will highlight whether you are underpaid or not.
Are COLA adjustments mandatory? There is no legal requirement for employers to provide cost-of-living adjustments. However, employees who are part of a union may have COLA pay as a part of their contract. For most employers, however, cost-of-living adjustments are entirely discretionary.
What is a reasonable raise to ask for? The average annual raise in the U.S. is approximately 3-5%, depending on the industry and region. Strong employees who want a salary raise can reasonably ask for 10-20% above their current salary and then negotiate with their managers from that starting point.
Typically, it's appropriate to ask for a raise of 10-20% more than what you're currently making. You can also use various online websites that take into account your job title, geographic location and experience level when determining a reasonable raise.
The conversation might begin with, "I'm grateful for the challenges and responsibilities I have taken on over the last year and a half. I've consistently exceeded my goals, and I'd like to talk about adjusting my salary to reflect this higher level of contribution."
In the WTW survey, U.S. employers report an actual average salary increase of 4.4% in 2023 during a year when BLS reported annual inflation of 3.1%.
Across industries and occupations, the average (mean) salary increase budget grew 4.4% in 2023. Median growth came in slightly lower at 4.0%. This reflects diverging trends between companies offering the lowest and highest pay increases.
A cost-of-living adjustment (COLA) is an increase in Social Security benefits to counteract inflation. Inflation is measured using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Automatic yearly COLAs began in 1975. The COLA for 2023 was 8.7% and for 2024 it is 3.2%.
| Period | Additional Income |
|---|---|
| 4 week month | $160 |
| 12 months in a year | $2,000 |
| Over 5 Years | $10,000 |
| Over 10 Years | $20,000 |
How long should you stay at a job without a raise?
Deciding when to leave your job because of a lack of pay raises is a decision you should make when you feel ready. If you've been with a company for more than two or more years, have showed good work ethic and have asked for a raise directly but still haven't received one, then it might be time to move on.
According to the US Bureau of Labor Statistics (BLS), the median annual wage across all occupations in 2021 was $58,260 [1]. For a person living in Phoenix, Arizona, where the median wage is $56,610, earning above the national average may be considered very good.
If the research you've done shows that you're underpaid, Krawcheck recommends setting up a meeting with your boss. Remind them of your recent wins, and then say, "I've done some research, and it appears I'm underpaid by x percent." Then stop talking. "We always want to fill the awkward moment, but just wait," she says.
When are pay raises required? Pay raises are generally a matter of agreement between an employer and employee (or the employee's representative). Pay raises to amounts above the Federal minimum wage are not required by the Fair Labor Standards Act (FLSA).
Key Takeaways
If you've recently received a raise or promotion, you may be disappointed that your increased salary or rate is not fully reflected in your take-home pay. There can be a variety of reasons for this, but the most common are taxes, retirement contributions, and health care costs.
