SURVEY: US Salary Budgets Expected to Remain the Same in 2025

Although fewer organizations report difficulty with attraction and retention, salary increase budgets at U.S. companies are projected to remain at the same level as last year. While salary increase budgets are stabilizing, with 2025 planned increases projected to be 3.7% on average compared with the 3.8% average budget awarded in 2024, they remain higher than the pre-pandemic norm of 3%. This is according to the latest Salary Budget Planning Report by WTW (NASDAQ: WTW), a leading global advisory, broking and solutions company.

Despite a conservative outlook for 2025, salary increases remain at a healthy rate by historic standards and amid higher total payroll expenses (which include salaries, bonuses, variable pay and benefit costs). According to WTW’s survey findings, the average increase in payroll for respondents was 5.5% in 2024.

For those companies planning to reduce salary increase budgets, weaker financial results (36%) and cost management concerns (34%) were the most commonly cited reasons. For those planning to increase salary budgets, inflationary pressures (39%) and tight labor market concerns (31%) were the most common factors.