What Is a Good Raise? Benchmarks & Math

"Good" Depends on Three Things

Is 4% a good raise? The answer depends on inflation, your performance, and your market position — the same percentage can be generous, average, or insulting in different contexts. This guide gives you a framework to evaluate any raise offer objectively, so you know whether to celebrate, accept quietly, or push back.

Start by converting the percentage into dollars with a Raise Calculator — percentages feel abstract; the monthly take-home number tells you what the raise actually buys.

Test 1: Does It Beat Inflation?

Subtract the inflation rate from your nominal raise to find your real raise:

• 5% raise, 3% inflation → +2% real gain. Genuinely good.
• 3.5% raise, 3.5% inflation → 0% real gain. Maintenance, not a reward.
• 2% raise, 4% inflation → -2% real change. A pay cut in disguise.

Any raise at or below inflation after a solid year is a signal, not a reward — especially when combined with expanded responsibilities. Our inflation and salary guide covers the long-term math.

Test 2: Does It Match Your Performance?

• Top performer: Expect meaningfully above the company average — typically 5% to 8%+ in normal years.
• Solid performer: The company average (often 3% to 5%) is fair.
• Below expectations: Little to no increase is normal — and a performance conversation matters more than the money.
• Expanded scope without a raise: Doing next-level work for a standard merit bump means you're underpaid for the role you're actually doing — see raise vs promotion.

Test 3: Does It Fix Your Market Position?

A raise can be above-average and still bad if you're far below market. If the market rate for your role is $110,000 and you earn $88,000, even a generous 6% raise ($5,280) leaves you $16,000+ short. In that case, "good" means a market correction of 10% to 20%+, not a slightly bigger merit bump. Check salary surveys for your role and metro, find your position in the band, and judge the raise against the gap — not just against last year's pay.

Benchmarks: What's Good by Situation

• Standard merit, solid performance: 3% to 5% is normal; above 5% is good.
• Top performer: 5% to 8%+ is good; below 4% deserves a conversation.
• Promotion: 8% to 15% is standard; under 8% for a real scope jump is weak.
• Market correction: Whatever closes most of the gap to market — often 10% to 20%+.
• Counteroffer: Be skeptical — see why counteroffers backfire even when the number looks good.

Beyond the Percentage

A "good" compensation change isn't only base salary. A 3% raise plus a doubled bonus target, an equity refresh, or an extra week of PTO can beat a 5% base-only raise in total value. And non-monetary gains — remote flexibility, a better title, a funded conference budget — have real worth. Evaluate the whole package, then decide whether the number deserves a thank-you or a follow-up conversation using our raise negotiation guide.

Conclusion

A good raise beats inflation, reflects your performance, and moves you toward market rate — all three, not just one. Run the three tests on any offer you receive. If it fails them, you don't have a compensation problem to accept; you have a negotiation to start. Translate any offer into monthly take-home pay with our free Raise Calculator.