Salary increase projections for 2025: increase budgets slowly declining

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Salary increase projections for 2025 are now available : read more

July 2024

Salary increase projections for 2025: Increase budgets slowly declining

As the labour market continues to balance out and inflationary pressures start to ease, salary increase budgets are continuing to trend towards pre-pandemic market norms.

In just four weeks, more than 350 organizations took part in our 2025 Salary Increase Survey. Preliminary results show that the Canadian average salary increase budget granted in 2024 reached 3.5%—slightly below the first quarter projections of 3.6%. Current projections for 2025 are calling for average salary increases of 3.4%, excluding salary freezes.

While projected increases are higher than historical trends, these preliminary results suggest that organizations are beginning a slow journey to reduce overall salary increases. Nevertheless, by maintaining these higher budgets, organizations ensure they can compete for talent and adjust to continued economic pressures.

Approximately half of responding organizations in Canada are planning for an average additional budget of 1.0% in 2025, while in 2024, that same number of responding organizations granted an additional budget averaging 1.1%. These ad hoc additional budgets provide organizations with greater flexibility and latitude throughout the year to address:

  • Off-cycle salary adjustments
  • Rewards differentiation for high performers
  • Employee retention
  • Internal equity issues
  • Accelerating the progression of employees in the lower end of their pay range

Total average increases granted in 2024 by all responding organizations in Canada was 4.3%, with a projected increase of 3.9%1 for 2025.

[1] Includes increase budgets and additional budgets. The data shown is lower than the sum of the average of the increase budgets and additional budgets because not all organizations have an additional budget.

Share your increase projections!

There’s still time to answer the survey. Participate by July 12 to receive detailed results in September, including the exclusive sections on:

  • Annual performance bonuses
  • Remote work policies
  • Pay transparency strategies
  • Equity, diversity and inclusion

 If you have any questions, email us at participant@normandin-beaudry.ca. 

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