In a survey from business.org, 77% of Americans thought they were underpaid at their current jobs. This means that many of them are regularly negotiating the terms of their pay. But when should you ask for a raise, and how much to ask for?
One of the best moments to ask for a raise is during the annual performance evaluation at your company when the standard “cost of living” raises are given. These raises are usually open to negotiation, and the reasonable amount to ask is usually between 10% and 20%, depending on a few factors.
Unless you’re being promoted, companies will usually give small raises of below 5%, but it’s not unreasonable to ask for more, especially if you’ve contributed a lot and done your job well.
A 1% or 2%, or even a 3% raise isn’t that great, and it’s there only to cover the cost of living. What you should be aiming at is at least a 5% increase, but this is usually hard to get, so you may want to know a few things before you ask for that increase.
A good time to ask for a raise is during the official salary review which happens once a year at most companies. Unless your responsibilities have significantly changed or you’ve had huge success in some project, it’s almost always better to wait for the annual review.
A good way to approach the issue of getting a raise is to ask your manager what can you do to get a raise. Ask them what you need to accomplish so that you can do it, and try to get specific actionable items. People don’t often ask these questions, but it can be that simple.
Usually, about 6 months before annual reviews is a good time to have a sit down with your manager and ask them how you are doing, and are you on track to meet your performance goals. Once the annual review comes, bring up those items, and ask for your raise.
With that in mind, your request for a raise needs to have a natural timing. Don’t ask for a raise during very difficult times for the company, or if the company will be in a bad position if you’d quit.
Ask for a raise after you’ve had success at some project, and especially if you’re rescued a project/company from a failure.
Your request for a raise needs to have a natural timing.
It’s a smart idea to have a job offer from another company before asking for a raise, so you can use it as bail if you don’t get your raise on the current job. Alternatively, you can use it as leverage though it could backfire in a way that the company might no longer consider you loyal, and would look for a replacement in the coming months.
What’s the best day to ask for a raise?
The best day to ask for a raise is probably Friday mid-morning, because your employer may be in a slightly better mood than usual. One psychologist suggested not to wait until Friday afternoon, since it may make you seem less confident unless your business is extremely busy during mid-mornings.
Reasons to ask for a raise
Here are some of the good reasons to ask for a raise:
If you’re underpaid according to the market and you’ve been doing your job well, then it may reasonable to ask for a raise as soon as 6 months at your new job. Otherwise, unless you’ve been exceptional or have taken greater responsibilities, it may be better to wait for the annual review.
While at your new job, ask yourself after 6 months how valuable you are to your company, how would they react if you resigned, and what would you do if they rejected your request for a raise.
Can you ask for a raise after 3 months?
Unless your employer specifically discussed the 3-month mark as the point of raise increases, or your responsibilities are significantly greater or you’ve saved a company from a disaster, you might want to wait for the annual review to ask for a raise, instead of asking only after 3 months.
How to figure out if you’re underpaid?
The best way to determine if you’re underpaid is to research how much are other employees paid who are in your position, in your location, with similar experience. If you’ve been with your employer for more than a year and you only got a ‘cost of living raise’, you’re probably underpaid.
In the case of larger companies, they don’t usually give raises except for promotions. The reason is that most people won’t leave. So you need to decide if you want to stay and get lured by chasing titles or move around to boost your income. You can easily jump 15-20% in salary when you change jobs.
Anything less than the cost of living is considered too low and is more of a pay cut than a proper raise.
The best thing you can do to determine how much to ask for is to do research on similar positions in your area, for employees who have a similar experience. You can use this to show your employer if you’re underpaid. Additionally, you can apply to other companies and see what they offer you.
How much is too much will depend on what your options are. If you have another offer in hand, and the market shows you should be paid much more, then you can ask even above 25%. It’s not like you’ll get fired for asking, and they’re not going to give you less by asking either, just make sure not to threaten or give ultimatums.
One important thing to keep in mind when asking for a salary increase is not to focus only on money, but on other perks and benefits as well that can come with it. You may not be able to get these at all jobs and positions, but some can be negotiated.
How much of a raise should you ask for after 1 year?
As a rule of thumb, you should at least get a pay raise equal to or higher than the inflation. Asking for at least 10% is a sensible amount after one year at the same company, but it will depend on your position, industry, your performance, and your current salary.
How much salary increase should you ask for a new job?
A typical salary increase when changing jobs is around 10-20%, but the amount people settle for depends on the benefits they get, the work culture, the stress, and whether they’re happy at their current jobs.
How much of a raise to ask for with a promotion?
The number varies a lot between industries, locations, and your position, but a typical raise for an internal promotion is usually around 5-15% for a lot of industries. You need to check internal policies on compensation for your company, and this set percentage for each step/grade level is usually subject to negotiation.
Can you ask for a 30 percent raise?
You may ask for a 30% raise, but be prepared to hear “No”, or be offered much less. If you’re not given any raise, you almost certainly won’t get fired, but your employer might expect you to leave, though. If you want a large raise, either move up in the company or switch companies.
When you ask for such a big raise, your employer needs to shuffle around his budget to accommodate you. So make sure to not give them an ultimatum, unless you’re ready to walk out the door today, which isn’t always the worst thing because the biggest raises come from switching jobs.
How to Ask for a Bigger Raise Than Offered?
A great way to negotiate a raise is by explaining to your employer how you are worth more than what they’re offering you and by comparing yourself to the market. Make sure not to overestimate your value to the company, stay respectful and confident, and provide documentation to back up your statements.
Negotiating a raisecan be a good thing if you believe you are being offered a salary below your current value. Just remember to say your thoughts directly and don’t dance about it.
If they offer you a 5% raise and you think that 15% is fair simply say that you think that 15% is a fairer recognition of your value to the company. You have to be specific because they can’t evaluate your position in the negotiation if you won’t tell them what it is.
If you have something valuable to offer to the company, you can say something like “I bring ABC to the table and will have XYZ additional responsibilities, so the fair market salary for that is $XX.” Make sure never to accept future promises, only written contracts.
Most employers give their employees an average pay increase of 3% per year. Even though this may seem like a good annual raise, it’s usually just to cover the cost of living, but 3-5% seems to be a better norm, and a 5-10% raise is something you should be aiming for.
According to the Willis Towers Watson survey, the average salary increases are will be around 3% for management, and 2.5% for production and manual labor. These numbers are very similar across industries, including retailers like Walmart, but they are still way below the inflation rate in the US.
How Often Should You Ask for a Raise?
Typically, if you didn’t get a raise in a year, then you may consider asking for one. How long to wait before asking for a raise will mostly depend on the industry, your position, tenure, location, the benefits you’re given, and freedom for professional growth.
Prices go up every year, and so should your salary. Most companies won’t give you a raise of 10% each year, but you can easily increase your salary by that much by switching jobs every 2-3 years, just make sure you’re not making huge gaps in your employment.
Do Companies Have to Give Raises Every Year?
Unless it’s specifically stated in your contract, companies have no obligation to give raises because a yearly pay increase isn’t required by law. So if you didn’t get the raise you can’t sue because you don’t have a right to one.
Even if there’s something in the contract regarding yearly rates, it’s probably stated in a way that protects the company in the case when they don’t give you one. This is especially true in large companies, where most employees get raises only during a promotion.
How Long Should You Work Without a Raise?
If you didn’t get a raise after one to two years to at least account for the rise in the cost of living, then you may want to start thinking about looking for a new job, especially if you have the skills and mobility.
How long should you stay at your job without a raise will depend on several factors, but mostly on the industry and whether you’re happy at your job.
Benefits play a big role as well. If you get a generous PTO, are 100% vested in 401(k), and have good health insurance, this might be enough for you to forgive a slow increase in your salary.
However, if your company thrives on the fact that they make everyone think how they are about to start layoffs any day, you should seriously think about leaving this company because it’s treating you badly.
If you want to maximize your paycheck then you need to leave jobs regularly and be selective about the companies, titles, technologies, and responsibilities you leave for.
You asked for a raise, how long should you wait for a response?
If your employer said they need time to think, you should politely wait so they can figure out how much and if they can give it to you. Usually, 1-2 weeks should be sufficient time for your employer to think it over. If two weeks had passed, talk to them about your raise, and do it in person.
Can You Get Fired for Asking for a Raise?
As long as you handle it right, and don’t make it an ultimatum, or ask for too high of a raise, there should be no risk of getting fired. The only way your employer may fire you is if you do something drastic, such as throwing a tantrum or threatening to leave.
You shouldn’t fear getting fired if you know you’re worth a raise, because you’ll never be able to advance and be happy. If your employer doesn’t value his employees, they can find all sorts of reasons to fire you.
By far, the safest option is to have a job offer from another company before asking for a raise at your current one. So always be looking for new opportunities, and have regular interviews. In the end, even if asking for a raise won’t get you fired, it may actually push you towards leaving your current job and finding a better one in which you’ll be much more valued and happier.
Hi, I'm the founder of HowMonk.com! Having been in finance and tech for 10+ years, I was surprised at how hard it can be to find answers to common questions in finance, tech and business in general. Because of this, I decided to create this website to help others!
