Most employers plan raises of about 3% for 2027. Prices rose 3.7% over the past year, and your health premium may climb too. Here is how to see what yours is really worth before pay talks and open enrollment.
How big are 2027 raises?
A July survey of 1,001 U.S. employers by Marsh’s Mercer found the average planned merit raise for 2027 is 3.2%, or 3.5% with promotions and other adjustments.
Some workers will get nothing. On Oct. 13, Sridhar Vembu, cofounder of India-based software maker Zoho, said employees would not get their usual raise this year, citing a fourfold jump in server prices and fast-rising AI costs.
What is your raise up against?
Consumer prices rose 3.7% in the 12 months through September, the BLS says, and Social Security benefits will rise 3.6% in 2027.
Health coverage can squeeze too. In KFF’s 2025 survey, the average worker paid $6,850 toward family coverage, up $554 (about 9%) from 2024, while wages rose 4%. KFF’s 2026 survey is due Oct. 22, so check it for this year’s numbers.
What is your raise really worth?
Compare your raise with the raise you would need to keep up with prices, then subtract any premium increase. Here is how it looks on a $60,000 salary.
| Example: $60,000 salary, family coverage | Amount |
|---|---|
| 3.2% merit raise (Mercer average) | +$1,920 |
| Raise needed to match 3.7% inflation (BLS) | $2,220 |
| Gap vs. inflation | About $300 short |
| Premium share increase, if it matches the 2025 average (KFF) | About $554 more out of pay |
| Rough real shortfall | About $850 |
Now try your own numbers. Your benefits portal should show next year’s deduction.
What should you bring to your pay talk?
- Your numbers. A 3.2% raise trails last year’s 3.7% inflation.
- Good timing. In July, 87% of employers said 2027 budgets were still preliminary, so ask early.
- Off-cycle options. 64% of employers say they give them or will in 2027.
- A plan B. If the raise is fixed, ask about a bigger premium subsidy, an earlier review, or a new title.
Which benefits protect your raise?
- Compare total cost, not just the deduction. Add a year of premiums, your likely deductible and copays, and the out-of-pocket maximum.
- Check doctors and prescriptions. A cheaper plan is no bargain if yours are not covered.
- Use FSAs for costs you are sure of. 2026 IRS limits are $3,400 for a health FSA and $7,500 for dependent care. Check your plan for 2027.
Picking a high-deductible plan? Our HSA guide explains the account that pairs with it.
The takeaway
A 3% raise is not 3% more spending power. Check it against inflation and your new premium, then negotiate and enroll with that real number in hand.
Sources: Marsh Mercer QuickPulse 2027 survey · Business Standard on Zoho · BLS CPI, September 2026 · SSA 2027 COLA · KFF Employer Health Benefits Survey 2025 · KFF survey 2024 · IRS Publication 15-B (2026) · IRS Rev. Proc. 2025-32
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