2026 SALARY INCREASES: BUDGETS CONTINUE TO DECLINE
- Average increases of 3.1% projected for 2026.
- Employers pressed to rethink compensation and total rewards strategies.
- 42% of organizations plan to secure additional budgets to address compensation challenges.
TORONTO, Sept. 2, 2025 /CNW/ – Normandin Beaudry, a leader in actuarial and total rewards consulting services, has released the results of its 15th annual Salary Increase Survey with more than 1,000 Canadian organizations participating in the 2026 edition. Results indicate that Canadian organizations are expected to continue scaling back their budgets for overall salary increases, with an average projected increase of 3.1% in 2026, excluding salary freezes – a 0.1% reduction compared to the actual increases allocated in 2025.
“With salary increase budgets continuing to decline, organizations face growing pressure to do more with less making it essential to strategically plan salary increases to retain talent and maintain workforce strength,” said Darcy Clark, Senior Principal, Compensation at Normandin Beaudry.
HIGHLIGHTS
Organizations continue to allocate additional salary budgets to address compensation challenges
In 2025, 42% of responding organizations allocated an average additional budget of 0.9%, consistent with the initial January 2025 projection. Looking forward to 2026, the same percentage of organizations (42%) are planning to secure the identical 0.9% average additional budget. These funds are primarily intended to:
- Support market adjustments to salaries (59%)
- Differentiate compensation for high performers (58%)
- Retain employees in strategic/critical roles (54%)
- Accelerate progression for employees lower in their pay range (38%)
- Address compression and internal equity challenges (37%)
- Retain employees with a perceived retention risk (27%)
- Provide for off-cycle salary increases (20%)
Industry sectors projecting high increases
The following sectors reported higher than the average increases projected for 2026:
- Pharmaceutical: 3.8%
- Construction of buildings: 3.8%
- Telecommunications, data processing, data warehousing and related services: 3.7%
- IT consulting services: 3.7%
- Accommodation, food services and tourism: 3.5%
- Professional, scientific and technological services: 3.5%
- Real estate, rental and leasing: 3.5%
“Although the labour market has become less constrained, strategic planning around salary increases remains essential for talent retention and sustaining workforce strength, particularly in the uncertain economic and geopolitical context. Organizations hoping to set themselves apart may benefit from adopting innovative approaches to balancing monetary and non-monetary elements in their total rewards,” concluded Clark.
The full report and interactive tool, with details by province, industry sector, size and type of organization, are available on the Normandin Beaudry website.
About Normandin Beaudry
Founded in 1992, Normandin Beaudry is recognized for its leading-edge total rewards consulting services. Independent and wholly owned by an ever-growing number of its professionals, Normandin Beaudry has an ownership structure that puts it in a unique position as one of the few major firms in the field with exclusively Canadian interests. From offices in Montreal, Toronto and Quebec City, a team of over 350 professionals serves an enviable list of clients across Canada that includes organizations of all sizes and industries from the private, public, para-public and not-for-profit sectors.
Excellence spans the globe! As an independent and equal shareholder in MBWL International since 2023, Normandin Beaudry’s reach now extends to 50+ countries.
About our compensation expertise
Normandin Beaudry’s team of over 40 compensation consultants is one of the largest in Canada. Through the sound and innovative use of data and technology, our versatile and creative experts provide clients with unique and simple solutions that address their strategic and operational needs. For more details, visit https://www.normandin-beaudry.ca/en/areas-of-expertise/compensation/
SOURCE Normandin Beaudry
