What Salary Raise Percentage Is Considered A Good Increase?

In an August 2025 episode, listeners of Dave Ramsey's podcast, "EntreLeadership," gained fresh insight into why some employees aren't satisfied with their raises, and what business leaders can do about it. A caller from Nebraska named Blake shared how employees at the physical security company he managed felt frustrated with their raises. Besides a 2% cost of living raise each year, employees were eligible for up to an additional 3% raise based on merit. The result: any time an employee received less than a 3% merit raise, they felt insulted, believing this implied that their performance was substandard. Blake admitted that calculations of a merit raise remained fuzzy, which didn't help. In response, Ramsey explained that, at his company, they don't use cost of living raises. Instead, they investigate what job positions currently pay and make marketplace adjustments as needed to compensate employees at a fair rate. In fact, Ramsey doesn't use percentages at all when calculating and discussing raises. Regardless of the approach a company takes, wpecific metrics on what constitutes a good raise can be subjective. Job site Indeed estimates that an average raise falls within 3% to 5% of a person's pay. But in general, a satisfactory raise should offset inflation while still slightly improving the employee's standard of living.

A December 2024 survey from BambooHR found that 32% of employees were dissatisfied with their most recent raise, up from 23% the year before. Respondents were salaried workers who received an average raise of 3.6% in 2024, a decline from 6.2% in 2022. Somewhere in the middle may be the happy medium.

If an employee isn't satisfied with their current pay or doesn't want to wait until the next annual performance review, they might decide to have a conversation with their boss about getting a raise. Although this can feel intimidating, this action can serve as a successful way to get more money. In a 2024 survey by LendingTree, a whopping 82% of full-time workers who asked for a boost in pay received one. In contrast, when looking at people who took a "wait and see" attitude towards getting an increase in pay, 66% of them got a raise. When delving more deeply into the percentage of people who asked for and got a raise, slightly more than half of them (51%) got one under $5,000 while about a quarter of them (24%) received between $5,000 to $9,999. The survey didn't quantify the percentage of the raise given, only the amount.  

Some employees talk to their coworkers about their pay rates to get a sense of where they fall in the workplace hierarchy. Although employers may discourage this from happening, according to the National Labor Relations Act, employees have the right to hold these conversations with fellow workers. In nearly one third of states in 2025, according to Salary.com, pay transparency laws actually mandate salary information disclosures to job applicants, giving employees a good sense of current pay rates at a company and allowing them to use this information as salary benchmarks.

Once someone gets good news about a raise, it can be tempting to shout the information from the rooftop. But it can make sense to think it over before sharing financial information with others. If this means you'll make significantly more than your friends, then this could cause friction. In fact, a 2024 study by Bread Financial found that 21% of respondents have ended a friendship over monetary reasons with 26% of them feeling financially incompatible with people in their circle. 

Even when that didn't happen directly because of a raise, news of one could cause friends to ask to borrow money, figuring that you've got more in your paycheck now. The study, though, noted how 30% of friends who borrow money from friends never pay them back with 33% of people involved in the survey saying that was a key reason for tensions in a friendship. A gender gap also exists with 24% of men saying that money has destroyed friendships for them while only 17% of women say the same.