Average Raise After 1 Year of Work: Average Salary Increase Per Year and Is a 3 Percent Raise Good?

The average raise after 1 year of work is about 3.1 percent, which is simply the standard US merit increase for 2026, because a first annual review rarely comes with a promotion or a repricing attached. On a 65,000 dollar salary that is 2,015 dollars a year, or roughly 78 dollars per biweekly paycheck before withholding. The number does not meaningfully improve at 2, 3, or 5 years of service either. What changes with tenure is not the raise, it is the distance that opens between your pay and what the same job is paying outside.

That last sentence is the whole article, and it is the part almost nobody puts a number on. Below is the number.

There is no dataset of raises by years of service, and that tells you something

If you go looking for an authoritative figure for the average raise after one year, two years, or five, you will not find one. The Bureau of Labor Statistics does not publish it. Neither do Mercer, WorldatWork, or the Conference Board, and they are the organizations that survey US employers on pay every year. That absence is not an oversight.

It is missing because tenure is not an input to the calculation. A US employer sets a merit budget once a year as a single percentage of payroll, then distributes it across the team using performance ratings and position in the salary range. Years of service is not in that formula at any large company. So the honest answer to "what is the average raise after 1 year of work" is the same as the answer for year four: it is the merit pool, and in 2026 that pool was 3.1 percent as actually delivered, against a 3.2 percent projection made in October 2025.

The full set of 2026 benchmarks, including the promotion and job change figures, sits on our average raise percentage page.

What a 3.1 percent raise actually pays

Percentages are easy to feel strongly about and hard to picture. Here is the first year raise in money, at salaries where most first reviews happen, before any withholding comes out.

Take roughly a quarter to a third off those paycheck figures for federal, state, and FICA withholding, and the 65,000 dollar row lands somewhere near 55 dollars a check. That is the real shape of an average first year raise. Our pay raise calculator will run your own numbers, including the reverse calculation if you have been given a new salary rather than a percentage.

Was it a raise at all? The inflation test

Inflation over the 12 months ending July 2026 was 3.4 percent, measured by the Consumer Price Index. The average merit increase was 3.1 percent. So the average first year raise in 2026 was a real pay cut of about three tenths of a percent, and the average raise counting every type of increase, at 3.4 percent, exactly matched prices and gained nothing.

If your household spends heavily on energy, your personal picture is worse than the headline. Energy prices rose 14.7 percent over the same 12 months while everything outside food and energy rose 2.5 percent. Two people receiving an identical 3.1 percent raise can honestly reach opposite conclusions about whether they came out ahead, depending on how far they drive and how they heat their home.

The tenure ladder: 6 months, 1 year, 2 years, 3 years, 5 years

Since the merit pool does not move with service, here is what genuinely differs at each stage.

Six months

Most people get nothing at six months, because there is no budget cycle to draw from. The exception is the one worth engineering: a written compensation review at six months, agreed at the time you accepted the offer. That is a real and commonly granted ask, particularly when a company could not meet your number on base. It is also the single most useful thing to negotiate when you are told the base is at the top of the band.

One year

Your first full merit cycle, so expect the pool: around 3 percent. Two things can push it higher. Some employers deliberately fund larger increases for new hires brought in below the band midpoint, on the reasoning that they were hired at a discount and the discount was never meant to be permanent. And a strong first year with a top performance rating typically pays somewhere between 1.3 and 2 times the pool, so 4 to 6 percent rather than 3.

Two to three years

Still the merit pool, unless a promotion lands. This is where the compounding starts to be visible, and it is also the window in which most voluntary moves happen, for reasons the next table makes obvious.

Five years

By five years the question is no longer about the raise. It is whether your salary still resembles the market rate for the work you are now doing, which is usually broader than the work you were hired for. Five annual merit increases will not have kept pace with that on their own.

The gap nobody shows you: five years of average raises

This is what tenure actually does. Take someone hired at exactly the market rate for their role on 70,000 dollars, who receives the average merit increase every year and is never promoted. Compare them against overall US wage growth, which the Atlanta Fed measured at 3.8 percent in July 2026 from Census microdata. Both figures are averages, both are recent, and the arithmetic between them is unforgiving.

Nothing dramatic happens in any single year. A 490 dollar gap after 12 months is not worth an argument. But the gap is multiplicative, and it grows on itself, so the person who has done nothing wrong and received a perfectly normal raise every single year is 6,650 dollars behind a decade later. That is the mechanism behind every story about a new hire earning more than someone who trained them.

The table also explains why the correction almost never arrives on its own. A percentage increase is applied to your current salary, so it preserves whatever error is already in it. A 3.1 percent raise on a salary that is 6 percent under market keeps you 6 percent under market, forever, with perfect arithmetic consistency.

Why changing jobs pays more, in one number

The Atlanta Fed publishes wage growth separately for people who changed employer and people who did not. In July 2026 the switchers were at 4.4 percent and the stayers at 3.6 percent, and the switchers have held the advantage for most of the past decade. The reason is not that employers are stingy. It is that your pay is reset to the market only at the moment someone has to compete for you, and internally, nobody has to.

None of that is an instruction to quit. It is an argument for knowing the number. Even if you have no intention of leaving, spending twenty minutes seeing what comparable roles are advertising right now is the cheapest compensation research available, and it is the same evidence your manager will need if you ask them to fix a gap. Pay transparency laws in more than a dozen US states mean many of those postings now carry a published good faith range.

What to do if your first year raise was 3 percent

Start by separating two questions that get tangled together. The first is whether the raise was fair, and at 3 percent out of a 3.1 percent pool, it almost certainly was. The second is whether your salary is right, and the raise tells you nothing at all about that.

Benchmark the role. Find the range for your exact title, level, and metro area, and find where your base sits inside it. If you are in the range, you are in the merit conversation and roughly 3 percent is the honest annual expectation no matter how good your year was. If you are below the range, you are not asking for a raise at all, you are asking for a market adjustment, which at most US employers is a separate budget with a separate approval path and a different argument behind it. Market data wins that conversation. Effort does not.

Timing matters more than people expect. Merit pools are locked months before the numbers are announced, so a compelling case made in review week meets a genuine "there is nothing left this cycle." Ask when compensation planning happens, and open the conversation before it. Asking for a raise has the full script, and if a promotion is the realistic route, the average one level promotion paid 8.5 percent in 2026 against that 3.1 percent merit figure, which is covered in how to ask for a promotion and a raise.

Is a 3 percent raise after 1 year good?

It is normal and it is slightly below inflation, so in 2026 it is a small real pay cut rather than a gain. It is not a signal that you are in trouble, because it is what most of your colleagues received. The judgment you should actually make is not about the 3 percent. It is about whether your base salary sits inside the market range for the job you are doing now, because that is the number a percentage increase can never fix.

What is a good raise after 1 year?

Five percent is genuinely good in this market, roughly 1.6 points above inflation and about 60 percent larger than the average merit increase. Anything from 8 percent upward almost always means a promotion or a market adjustment rather than merit, because merit pools are not large enough to fund it. If you were given 8 percent and called it a raise, it is worth asking your manager which budget it came from, because the answer tells you how the company sees your trajectory.