WTW published the number on July 15. U.S. employers are planning to spend an average of 3.4% of payroll on pay increases in 2027, based on 1,650 organizations surveyed between March and May. Mercer polled 1,001 U.S. companies in mid-July and got 3.5%. Your employer has seen those benchmarks. You will probably find out what they mean for you in February. That gap, between the month the money gets allocated and the month you get told, is why most advice on how to ask for a raise misses. The script matters less than the calendar.
Your February raise is being decided right now
Compensation planning is a budgeting exercise before it is a performance exercise. Finance and HR settle on a merit pool, expressed as a percentage of total payroll, and that pool gets pushed down to department heads as a fixed allocation. Only then do managers write reviews and slot people into it. The reviews feel like the decision because they are the part you see. They are the distribution step.
Look at when the benchmark data lands. WTW fields its survey from March through May and publishes in July. Mercer runs its pulse in mid-July. Consultants time those releases for a reason: employers need a market number in hand before they build next year’s budget in the fall. By January, when your manager schedules the review, the pot is already sized and approved. She can move you within it. She usually cannot make it bigger.
That reframes the whole exercise. Asking in February is asking someone to take money from a colleague. Asking in September is asking someone to argue for a larger allocation before anyone has claimed it.
A 3.4% budget is an average, not a promise
Here is the part that gets flattened in every “average raise” headline. A 3.4% pool does not mean everyone gets 3.4%. It means the weighted average lands there. Somebody gets 1.5% and somebody gets 6%, and the spread is exactly what your manager is deciding in the fall. WTW’s own framing this year was that employers are moving away from broad-based increases toward targeted, performance-driven allocation. Translated: the spread is getting wider.
There is a second pot most people never ask about. WorldatWork’s survey of 2026 budgets found that 73% of organizations fund promotional increases separately from merit increases. That money is not part of the 3.4%. If your job has grown and the title has not, you may be arguing for the wrong line item. Before you ask what your increase will be, ask which budget you are being paid out of.
How to ask for a raise while the budget is still soft
None of that helps in February, when the allocations are printed. It helps enormously in September, when they are still a spreadsheet somebody is arguing over. Book thirty minutes in the next two weeks and frame the meeting as planning, not petitioning. Something close to this: “I want to be in the 2027 planning conversation rather than reacting to it in February. Here is what I took on this year, here is what the market pays for it, and I’d like to understand what would need to be true for me to be at the top of the range.”
Bring an outside number. This is easier than it was three years ago. Eighteen states plus Washington, D.C. now have pay transparency laws on the books, and in states including California, Colorado, New York and Washington the salary range has to appear in the job posting itself. Your own employer’s open listings are a public statement of what it will pay for your title. So are its competitors’. Pull three postings, take the midpoints, and put them on the table. That is market data your manager cannot wave off as a feeling.
Then ask what the binding constraint actually is. There are only three. The pool is too small, you are at the ceiling of your salary band, or your title does not support the number. Each one has a different fix, and a manager who tells you which one you are hitting has handed you the map for the next six months.
What 3% versus 6% actually costs you
Take a $68,000 salary, which is squarely in the range where this decision gets made quietly. A 3.4% increase is $2,312. A 6% increase is $4,080. The first-year difference is $1,768, which is real but not life-changing, and that is precisely why people let it go.
The problem is that base pay compounds. Every raise after this one is a percentage of the new base. Run both paths forward and give each the same 3.4% treatment for the next four years. The first path reaches $80,373. The second reaches $82,394. The annual gap has grown to $2,021, and across the five years you have earned roughly $9,460 less on the low path. If your employer matches 4% of pay into a 401(k), the year-one difference alone quietly adds another $71 to the account, and that money compounds too.
For scale, the Bureau of Labor Statistics reported that private-industry wages and salaries rose 3.1% over the twelve months ending in June 2026. A 3.4% raise keeps pace with what everyone else is getting. Everything above that is the actual raise.
The ask is the cheapest part of this
A LendingTree survey of 2,049 adults, conducted in October 2024, found that 82% of full-time workers who asked for a raise in the previous year received one. Fewer than half of workers asked at all. The same survey found 49% of men had raised the subject compared with 35% of women.
A “no” in September is not a wasted meeting. It puts your name in the room while the pool is being argued over, and it usually produces the specific reason, which is the thing you cannot get from a job board. A “yes” resets a number that every future percentage is calculated from, at this employer and at the next one, since outside offers get anchored to what you already make.
If your review cycle runs on the calendar year, the useful window is closing over the next six to eight weeks. Between now and then, do three small things. Write down what you took on since January that was not in your job description last year, with a number attached wherever one exists. Pull the salary ranges from three live postings for your title, including your own employer’s. Then send the meeting request. The full answer to how to ask for a raise turns out to be mostly a matter of when, and September is the month the money is still on the table.
While you are in the neighborhood, check that you are capturing the full employer 401(k) match on your current salary, and take ten minutes on the workplace benefits most people leave unused. A raise you negotiate and a benefit you already qualify for spend exactly the same.
