The average pay rise in 2026: UK and Europe edition

What salary increase do employees receive on average per year? Is the average pay rise changing over time?

These questions are always top of mind for People and Reward Leaders planning their next compensation review.

And with good reason – fair and competitive pay is key to hiring and retaining the talent your business needs.

If your talent competitors start granting bigger pay rises than you, your salaries will quickly look less attractive, and if you’re paying new hires current market rates but skimping on pay rises for existing employees, you’ll find yourself with a salary compression and retention problem too.

So, to help, let's take a look at the latest data on average salary increases – from Ravio's 2027 Compensation Trends report.

What is the average pay rise in 2026?

The average salary increase in 2026 is 4.2% (source: Ravio Compensation Trends 2027).

This is the median pay rise that employees received in the 12 months to Q3 2026 within their existing job role (i.e. from in-role pay adjustments, but not promotions).

That's lower than the 5.0% median in both 2025 and 2024, but still within the typical 3-5% range for annual pay rises.

When employees are promoted, the typical increase is much bigger.

The median promotion-based salary increase in 2026 is 21.8%, up slightly from 21.2% in 2025 – see our data on average promotion rates and promotion pay rises for the full breakdown.

What is the average pay rise in the UK in 2026?

In the UK, the average pay rise in 2026 is 4.0%, down from 5.0% in 2025 and 6.1% in 2024 (source: Ravio Compensation Trends 2027).

That puts UK tech slightly below the European median of 4.2%.

How does the typical UK pay rise compare with UK wage growth?

The UK figure most often quoted for pay rises comes from the Office for National Statistics (ONS). Its latest release puts annual growth in regular pay (excluding bonuses) at 3.5% for May to July 2026 – 2.9% in the private sector and 6.3% in the public sector. Adjusted for inflation, real regular pay growth was 0.8%.

This measures something very different to the average pay rise, though.

ONS wage growth tracks how average weekly earnings change across the whole economy, so it reflects changes in who is employed as well as individual pay rises and changes in typical salary for new hires.

Ravio's 4.0% figure for the UK is the median pay rise tech employees received within their existing role – a more direct benchmark when planning a pay review for a tech workforce.

As we’ll see later, a third of companies (33%) factor inflation or cost of living changes into their salary increase decisions, so this is captured within the average pay rise data – but it’s worth noting that, once you do adjust for inflation, the typical 3-5% pay rise doesn’t represent a meaningful increase in disposable income for most employees.

How does the average salary increase in 2026 vary across Europe?

For those employees who receive one, the average salary increase in 2026 ranges from 3.2% in Sweden to 5.0% in Spain (source: Ravio Compensation Trends 2027).

Compared with 2024, the typical pay rise amount is lower in every market except Spain.

Spain is the outlier – the only market where the typical pay rise is higher than last year, and now the highest of the six markets at 5.0%.

The Netherlands, which had the highest typical increase last year (6.3%), is now in line with the UK and France at 4.0%.

Sweden has the lowest typical pay rise, at 3.2%.

Does the average pay rise vary by job function?

Looking at Ravio's Compensation Trends report data on median salary increases per job function, every function tracked has a lower typical increase than last year – and increases are similar across functions, ranging from 4.0% to 5.0%.

This uniformity suggests most companies don't change their salary increase approach for specific functions – differences between employees come down more to performance and market position (more on this later) than to job family.

Does the average pay rise vary by company stage?

Early-stage and growth-stage companies gave the biggest typical pay rise in 2026, at 5.0%, while late-stage companies gave 4.0% (source: Ravio Compensation Trends 2027).

After a sharp drop last year, the typical increase at early-stage companies is back in line with growth-stage companies. Late-stage companies now have the smallest typical increase – but they also saw the biggest jump in the share of employees getting a raise (from 12.3% to 20.0%), suggesting budgets are being spread across a larger group.

Do all employees get a pay rise?

Whilst the average pay rise is 4.2% in 2026, this only accounts for employees who do receive a pay increase – and not every employee does receive one.

In fact, only 20.8% of employees in European tech received a salary increase in the past year.

That’s up from 15.7% the year before.

It’s a sizeable jump in how many people got a raise this year – combined with a slightly smaller typical increase, this points to pay review budgets being spread across more employees rather than concentrated on a few.

Even so, most employees still didn't receive an in-role pay increase this year.

With market rates rising for many roles, employees who go several years without an adjustment can drift below market – which becomes a retention risk, especially if external opportunities improve.

Paula Aragon, Senior Total Rewards Specialist at Storyblok, expects that to keep shifting as companies prepare for pay transparency.

"One of the biggest reasons we'll see more increases is the EU Pay Transparency Directive," she says.

"We've started budgeting for market and internal equity adjustments on top of merit increases, running internal pay equity analysis and identifying who needs adjusting proactively now, to avoid more cost and exposure further down the line."

Marie Kanellopulos, CEO of DONE!Berlin, agrees. "To me, broader eligibility but a flat increase size suggests a pay equity clean-up,” she says.

“Companies reviewed their structures ahead of the transparency directive, found people sitting below their own band, and so fixing that means small corrections to many people."

How many employees get a pay rise in each country?

The share of employees receiving a pay rise varies far more by country than the size of the raise itself – from 10.8% in France to 35.2% in Sweden (source: Ravio Compensation Trends 2027).

The share of employees getting a raise in Germany has doubled – but, as Marie Kanellopulos explains, that's less of a shift in behaviour than it looks.

"There's a very German reason for the jump in pay increases there," she says.

"Until the end of 2024, Germany had a tax-free inflation bonus with no social security on it. That instrument expired, so the same money now runs through salary instead – so it's mostly a measurement effect rather than a behaviour change."

What pay rise should employees expect at the next review cycle?

Pay review budgets look set to stay flat next year.

In Ravio's survey of People and Reward Leaders (September 2026), 43% plan to keep their salary increase budget flat for the next cycle, and only 9% will make significant budget changes (6% increasing significantly, 3% decreasing significantly).

Where budgets are changing, cost control (28%) is the most common driver, ahead of market competitiveness (16%) and business performance (11%). Regulatory change, including the EU Pay Transparency Directive, is cited by just 2% (multiple answers allowed).

But the same budget can play out very differently.

For some survey respondents, a flat budget still means a pay rise for almost everyone. "Our budget is staying flat this year due to budget constraints, but we're still giving a typical 4% increase to almost everyone," one survey respondent told us.

Others are concentrating budget on fewer people. One company increasing its budget slightly is making "targeted increases for a small slice of the workforce, not an across-the-board move", while another, whose pool is decreasing significantly, is still giving increases of "around 10%, just for a much smaller group".

Where budgets are shrinking more gently, the approach can flip the other way. "Nearly everyone will still get something, but it'll be a modest 2%," said one respondent.

And some are holding budget back for pay equity work: "We expect more off-cycle adjustments this year due to pay equity analysis which will be taking place, so we'll need to save budget for that."

For individual increases at the next pay review, the Reward Leaders we surveyed expect:

• A typical increase of 4.0%, with most expecting between 3.0% and 5.0%
• A top-performer increase of 6.0%, with most expecting between 5.0% and 10.0%.

How do companies decide what salary increase to give their employees?

Companies use many factors to determine the salary increase that their team will receive.

Budget is one practical but important factor which often limits the size of salary increase available to team members.

Beyond this, the most common factors in Ravio's September 2026 survey of People and Reward Leaders are:

• Individual performance. 85% of companies factor individual performance into salary increase decisions – so the size of each increase varies based on performance rating.
• Market adjustments. 68% factor in market adjustments, reflecting changes in market rates per role and location so employee pay stays fair, competitive, and in line with the company's compensation philosophy – and this is more and more including pay equity fixes too.
• Business performance. 49% consider how the business is performing.
• Retention risk. 39% factor in the risk of losing an employee.
• Inflation and cost of living. 33% adjust for inflation.

Individual performance is the clear leading factor, included for the vast majority of employees – and we also saw in the survey that Reward Leaders expect top performers to receive a 6.0% increase at their next pay review, compared with 4.0% for a typical employee.

At Bolt, that differentiation is built into the recommendations managers receive, explains Evert Kraav, Head of Compensation & Benefits.

"We give a recommendation based on performance rating and where someone sits in their band, with a deliberate ratio between ratings – if an average performer gets one increase, a top performer might get double that," he says.

"Managers can flex it, but the instruction is that the differentiation needs to be real."

Putting it into practice: advice from Reward Leaders on how to approach pay rises

Benchmarks like those above tell you what the market is doing, on average. Deciding your approach, and what each employee actually gets is a whole different ballgame.

Here's what Reward Leaders we've worked with recommend:

• Agree the budget with Finance early. At commercetools, the budget conversation for a February merit cycle starts the previous October. "It is always all about multiple demands on a finite budget," says Ekaterina Potter, Global Director of Reward and Belonging. With 43% of companies planning flat budgets for the next cycle, that negotiation is where you make the case for market and equity adjustments – see our guide to setting a salary increase budget.
• Set eligibility rules upfront. Aeven excludes anyone hired or given a pay rise in the three months before the cycle – they haven't been through a full performance period yet, and it frees up budget for other gaps.
• Factor in salary band position, not just performance. A flat percentage per performance rating lets well-paid employees pull further ahead of equally strong peers. A merit matrix weighs both. "The person who is the best performer but lowest in the range deserves a higher percentage increase, and vice versa," says Ekaterina. Commercetools gives managers a range for each box in the matrix (for example 0-2%, 3-4%, or 5-7%) rather than a fixed number.
• Decide how much say managers get. In Ravio's pay review survey, the most common approach (41% of companies) is for the Reward team to set recommended increases that managers can then adjust, while 20% give managers full control and 16% give them none. More on getting the balance right in our guide to manager discretion.
• Calibrate before you finalise. If pay rises are tied to performance ratings, run calibration sessions first, so every manager is interpreting performance the same way before ratings turn into pay. Circulate initial ratings beforehand, and spend the meeting on overall trends and the employees managers disagree on, rather than giving everyone equal time. Noor van Boven, Co-founder of Invested, points out that "there's usually immediate consensus on top performers" – the value is in the contested cases. And train managers first: "Calibration is a muscle that needs training," she says.
• Check pay equity before you sign off. Proposed increases can quietly widen existing gaps – especially if one group is more likely to receive top ratings. Vaso Parisinou, Chief People Officer at Ravio, brings pay equity data into the calibration room, then tests the outcome: "You need to understand how the performance ratings agreed upon during the calibration session will impact pay equity – if we made compensation adjustments based on those ratings, would our gender pay gap worsen?" With the EU Pay Transparency Directive in force, it's also worth ring-fencing budget for pay equity adjustments.
• Watch for the "peanut butter spread". When budgets are tight, managers often split their budget evenly across the team to avoid difficult conversations. A clear framework, plus written justification for any departure from the recommended increase, keeps pay rises differentiated.
• Have a plan for top performers at the top of their band. First check whether it's really a band problem: if bands are out of date, refresh them rather than working around them. "If you find that your framework is starting to limit your ability to hold on to high performers or incentivise high performers, then you potentially need to rethink the structure of that framework," says Matt McFarlane, Director at FNDN. "Your salary framework needs to serve the business." Where the bands are right, a one-off lump sum recognises performance without pushing pay above the range – commercetools uses one-time bonuses "to avoid the same top-of-band problem compounding year-on-year", says Ekaterina. More in our guide to rewarding high performers at band maximum.
• Prepare managers for the conversation. A pay rise lands very differently depending on how it's explained. "Be clear about the role of the Rewards team and the role of the line manager when it comes to compensation communication," says Vaso Parisinou, Chief People Officer at Ravio – see our guide to communicating compensation changes.

For the full step-by-step process, see our complete guide to compensation reviews, and our guides on how to run a merit cycle and how to ensure merit increases are effective.

FAQs

What was the average pay rise in 2025?

The average pay rise in 2025 was 5.0% (Ravio data) – the same as in 2024. In 2026, the median in-role pay rise across European tech is 4.2% (Ravio 2027 Compensation Trends report).

How has the average pay rise changed over time?

Ravio's Compensation Trends reports show the following median in-role pay rise across European tech:

• 2022: 8.0%
• 2023: 5.3%
• 2024: 5.0%
• 2025: 5.0%
• 2026: 4.2%

Each year's figure reflects the companies in Ravio's dataset at the time, so small year-on-year differences are best read as a guide rather than a precise change.

What is the average yearly salary increase?

The average yearly salary increase across European tech is 4.2% (Ravio 2027 Compensation Trends report). It varies by location, from 3.2% in Sweden to 5.0% in Spain. Not every employee receives a salary increase each year, though – 20.8% received one in the past year.

How much should your salary increase per year?

There's no fixed amount, but in European tech the typical in-role pay rise is 4.2% a year (4.0% in the UK) – from Ravio’s 2027 Compensation Trends report. How much yours should increase depends on your performance, where your salary sits in its band, and how your pay compares with the market rate for your role. Reward Leaders expect to give a typical employee 4.0% at their next pay review and top performers 6.0% – and companies using a merit matrix often give bigger increases to strong performers paid low in their band.

How much of a pay rise should I ask for?

Use market data as your anchor. The typical pay rise in European tech is 4.2% (4.0% in the UK), and top performers can expect around 6.0%. If your salary has fallen below the market rate for your role, a larger market adjustment may be justified – check salary benchmarks for your role, level, and location before the conversation. If you're moving up a level, a promotion typically comes with a much bigger increase, with a median of 21.8%.

How much is a typical promotion salary increase?

A typical promotion salary increase is 21.8%, according to Ravio's 2027 Compensation Trends report. This is significantly higher than in-role salary increases (which average 4.2%), reflecting the jump in compensation that comes with moving to a higher job level. Promotion increases vary by location, with France offering the highest median increases at 31.2% and Spain the lowest at 20.1%.

Is a 3% pay rise good?

A 3% pay rise is below the 4.2% median pay rise in European tech in 2026, and at the lower end of what Reward Leaders expect to give at their next pay review (most expect 3.0-5.0%). It's closer to the norm in Sweden, where the median is 3.2%. A 2% pay rise is further below the market, though it's what some companies with shrinking budgets plan to give. For wider context, UK private sector regular pay grew 2.9% in May to July 2026 (ONS).

Is a 4% pay rise good?

A 4% pay rise is in line with the typical increase in the UK, the Netherlands, and France in 2026 (all 4.0%), and slightly below the European tech median of 4.2% (Ravio 2027 Compensation Trends report). It's also the typical increase Reward Leaders expect to give at their next pay review.

Whether it's "good" depends on context. Location is a factor, for instance – in Spain (5.0% average) it would be below market, whilst in Sweden (3.2% average) it would be above.

It's also important to consider your role's market rate and performance: companies typically use salary increases to maintain market competitiveness and reward performance, so comparing your increase to both market averages and your own contribution provides a fuller picture.

Is a 5% pay rise good?

A 5% pay rise is above the 4.2% median in European tech in 2026, and at the top of the range most Reward Leaders expect to give a typical employee at their next pay review (3.0-5.0%). It matches the median in Spain and in the People function. Top performers can expect more – Reward Leaders expect to give top performers a median 6.0% increase.

What is considered a good pay rise?

A good pay rise is one that keeps your compensation competitive with current market rates for your role, level, and location, whilst recognising your performance and progression. According to Ravio's 2027 Compensation Trends report, the median in-role salary increase across European tech is 4.2%, whilst promotion-based increases average 21.8%.

Should pay rises keep up with inflation?

There's no rule that pay rises must match inflation, and most companies don't index pay to it automatically. In Ravio's survey of People and Reward Leaders, 33% factor inflation or cost of living into salary increase decisions – far fewer than the 85% who factor in individual performance or the 68% who factor in market adjustments. In the UK, regular pay grew 3.5% in May to July 2026, or 0.8% once adjusted for inflation (ONS).

Is there a legal requirement to give a pay rise in the UK?

No – UK employers aren't legally required to give annual pay rises, unless one is written into an employee's contract or a collective agreement. The exception is the statutory minimum: the National Living Wage rose 4.1% to £12.71 an hour from 1 April 2026, so anyone paid at that rate had to receive at least that increase.

How do you calculate a pay rise percentage?

Subtract the old salary from the new salary, divide the difference by the old salary, and multiply by 100. For example, a salary increase from £50,000 to £52,100 is a 4.2% pay rise: (£52,100 − £50,000) ÷ £50,000 × 100 = 4.2%.

How do you decide individual pay rises from a salary increase budget?

Start with the total budget, usually set as a percentage of payroll – a 4% budget on a £2 million payroll gives you £80,000 to allocate. Then decide how it's split: most companies use performance ratings and band position (often through a merit matrix), so strong performers paid low in their band get the biggest increases and those near the top of their band get less. Model the recommended increase for every employee, check the total fits within budget, and hold some back for market and pay equity adjustments. See our guide to setting a salary increase budget for the full process.