
January 2025
Salary increases for 2025: Canadian budget forecasts remain closely aligned with summer projections
In late 2024, nearly 400 organizations across Canada participated in Normandin Beaudry’s annual 2025 Salary Increase Pulse Survey.
As the labour market continues to balance out and inflationary pressures ease, salary increase budgets are continuing their gradual decline towards pre-pandemic market norms.
Results indicate that approximately two-thirds of organizations are planning to maintain their initial salary increase budget, with only 32% of participating organizations reporting changes to their initial budget from last summer. For organizations planning adjustments to their initial budget, more than half are making a reduction while the rest intend to increase their initial budget. In Canada, the overall national average budget forecast decreased by 0.1% to 3.3%, slightly lower than the summer forecast of 3.4%, excluding wage freezes.
Beyond the traditional salary increase budget, 42% of respondents have allocated an average of 0.9% of payroll for additional budget funds. The primary purpose of these additional budgets is intended to:
- Allow for ad hoc market adjustments: 68%
- Differentiate compensation for high performers: 51%
- Retain strategic or mission-critical employees: 48%
The purpose of the additional budgets aligns with our findings in previous years, highlighting that organizations are still making planned investments in their employees’ compensation package to remain competitive in the job market. While these additional budgets support adjustments to employee compensation, most organizations are looking beyond monetary rewards to help support their total rewards portfolio. In 2025, organizations are also focusing internally on their total rewards foundations, with strategies aimed at:
- Ensuring the competitiveness of their total rewards programs: 58%
- Focusing on employee engagement and communication: 57%
- Reviewing job architecture and job hierarchy: 32%
With employees expecting greater levels of employer transparency, organizations are focused on developing and refining their broader employment experience.
While data suggests that annual salary increase budgets are beginning to stabilize, it should be noted that 2025 forecasts remain above both historical trends and current rates of inflation. The 2025 average forecasts by province and territory are summarized below.


The average 2025 salary structure adjustment is now forecasted at 2.6%, excluding organizations that anticipate a freeze to their salary structure. These findings are consistent with initial findings observed over the summer months.

Looking for more information about the 2025 Salary Increase Pulse Survey and its results? Contact your Normandin Beaudry consultant or email us.