Salary budgets in 2026 are stabilizing as boards and senior leaders move beyond the short-term adjustments of recent years. Inflation remains volatile in many countries, reflecting varied conditions in markets around the world. Recently released data suggest leaders are returning to measured, disciplined salary increases, with fewer signs of reactive or inflation-driven spikes.

What is happening with salary increases in 2026?

WTW’s mid-year 2026 Global Salary Budget Planning Report reveals actual salary increases for 2026 are generally tracking with predictions in large markets worldwide. For example, actual salary increases range from 2.9% in France to 4.3% in China and 4.8% in Mexico. They’re 3.5% in the U.S. and U.K and do not deviate considerably from there: 3.2% in Germany, 3.3% in Spain 3.3% in Japan and 3.4% in Canada. In the U.S., the actual 2026 increase is generally consistent with the previously reported planned 2026 increase of 3.4%. This contrasts 2025 where actual increases came in below planned increases (3.5% versus 3.9%).

According to the report, pay budgets remain largely steady, with nearly 60% of organizations reporting no change between anticipated and actual salary budgets. Cost management pressures (32%), a tighter labor market (28%) and inflationary concerns (27%) continue to drive employers’ cautious approach to salary planning. Salary increases remain relatively high by historic standards (the pre-pandemic norm was 3%) amid higher total labor expenses, which include salaries, bonuses, variable pay and benefits costs. Leaders continue to focus on employee wellbeing and the increasing costs of medical care, which WTW’s 2026 Global Medical Trends Survey expects to........

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