Average Pay Increases in U.S. and Canada Dropped Below 4% in 2024

U.S. and Canadian employers provided 4% median salary increases in 2024 (on par with their practices from 2023) and 3.9% average pay increases (down from 4.3% in 2023). This is according to the results of the 14th annual Salary.com National Salary Budget Survey, released Oct. 29.

For this year’s report, Salary.com, a provider of compensation data, software and services, surveyed more than 1,000 HR professionals across 20 industries.

Salary.com attributed the drop in 2024 average pay increases to fewer employers providing higher-level raises to employees. The new report showed the number of organizations giving raises between 5% and 6.9% fell from 25% in 2023 to 14% in 2024. The company pointed to several factors in the year-over-year decrease, including:

Lower inflation, and
Generally stable unemployment (after the economic instability fueled by the pandemic and the Great Resignation).

The survey also showed a return to typical salary increases of 3% to 3.9%. More than 1 in 3 respondents (38%) delivered increases within that percentage band this year, compared to 25% in 2023. The report projected similar results for 2025 as seen in 2024.

That 2025 pay increase picture aligns favorably with projections for U.S. employers from other recently released salary budget surveys. These include:

WorldatWork: 3.8% mean salary increase budgets
Mercer: 3.3% merit increases, 3.6% total salary increases
The Conference Board: 3.9% salary increase budgets
Payscale: 3.5% average salary increases
WTW: 3.9% median salary increases

“Last year, we noted that salary increases might be at a peak, even with 4% becoming the norm. While 4% remained the median in 2024, further analysis suggests a shift is happening,” said Andy Miller, the vice president for compensation consulting at Salary.com. “This is important for HR and compensation teams as they plan budgets for next year.”

The Salary.com report also highlighted data and storylines for 2024 based on:

Geography. In the U.S., the Northeast was the region with the lowest salary increases (3.6%, compared to the national average of 3.9%), while the West Coast was the region with the highest. Drilling down to major cities within those two regions, New York City (3.7%) and Boston (3.3%) had lower increases compared to San Francisco (4%) and Seattle (4.3%).
Industry. The construction (4.2%) and education, government & nonprofit (4.3%) sectors had the largest increases. Hospitality (3.4%) and transportation (3.6%) had smaller increases. Hospitality continues to adapt to local and regional minimum wage changes while recovering from the pandemic.
Work arrangement. Defining pay for remote employees remains a challenge for employers. The most common approach in 2024 was to set pay based on the employee’s primary residence (29%). Other methods included using a national pay rate (24%), regional pay rates (14%) or the closest employer location (12%). Approximately 14% of respondents did not have remote employees.

“In 2024, many organizations experienced a level-set moment,” said Miller. “Some sectors and regions saw increases, while others saw decreases, matching changes in labor markets, new laws and evolving situations. Staying on top of these trends is key to good planning.”

Access top-level results from WorldatWork’s 2024-2025 report now. The full report — covering base salary increases and merit budgets for 22 countries and in-depth salary budget insights for the U.S., Canada, India and the United Kingdom — is also available for purchase. Report purchase also provides access to the U.S./Canada Online Reporting Tool to build customized reports based on industry, organization size and/or geographic area.

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