Boston, Aug. 04, 2026 (GLOBE NEWSWIRE) -- Payscale, the leading provider of compensation intelligence solutions, today released its 2026-2027 Salary Budget Survey, revealing that employers are entering 2027 with slightly higher pay increase expectations and are beginning to move away from the one-size-fits-all compensation strategies that defined the 2025-2026 pay cycle.
Payscale’s Salary Budget Survey, a key resource for HR and compensation professionals determining pay increase strategies for the upcoming year, shows that average total base-pay increases in the U.S. are expected to rise to 3.5% in 2027, up from 3.4% in 2026. While the increase marks a slight improvement, it remains broadly in line with inflation, meaning many employees may experience little meaningful growth.
After several years of similar or declining pay increases, employers are feeling a sense of pay paralysis. While economic concerns may be less significant driving forces than in recent years, employers must still be cautious in how they allocate limited budgets.
The shift in budget planning shows a notable change in how employers are thinking about pay. While peanut butter pay, or the practice of spreading the same increase broadly across employees regardless of performance, was a defining pay trend heading into 2026, the approach appears to be losing momentum heading into 2027. According to Payscale’s Compensation Best Practices Report, fielded in late 2025, 44% of organizations were adopting or considering across-the-board pay increases heading into 2026. An actual 36% ended up giving across-the-board increases compared with 32% that now plan to use a standard increase in 2027, while another 8% remain unsure.
“Peanut butter pay may be losing some of its spread, but it hasn’t disappeared,” said Ruth Thomas, chief compensation strategist at Payscale. “Organizations appear to be moving toward more thoughtful and differentiated compensation strategies — which is critical to attracting and retaining talent. When compensation budgets are limited, treating every employee the same feels simple and fair, but it can also fail to recognize the people, skills and contributions that are most critical to the business.”
Additional findings from Payscale’s 2026-2027 Salary Budget Survey include:
- Unfair pay perceptions remain a talent risk. One in four organizations (25%) say perceptions of unfair pay are a leading reason they are losing talent, underscoring the importance of ensuring pay strategies are not only competitive but also perceived as fair and equitable by employees.
- Merit remains central to the 2027 pay mix. U.S. organizations anticipate a 3.5% total payroll increase budget in 2027and the largest portion is allocated to merit increases. This shows that employers are using limited salary budgets strategically and differentiating rewards based on performance and other factors.
- Economic outlook is reshaping compensation planning. Organizations expecting higher budgets most often point to improved economic conditions or business performance, while those expecting lower budgets continue to cite concern about future economic conditions or business performance as the leading factor. The share of organizations with lower budgets citing concern about future economic conditions fell from 66% last year to 42% this year.
Payscale provides its Salary Budget Survey as a free data resource to help organizations plan their budgets effectively. To download the report, which includes insightful analysis on pay increases by employee type broken out across industry, revenue, company size, organization type, and geographic segments, visit Payscale.com.
Methodology
Payscale clients and contacts were invited to participate in our Salary Budget Survey (SBS) in May-June 2026 via email. Submissions were accepted through June 12, 2026, resulting in 1,266 usable submissions. The full methodology is included in the report.
About Payscale
Payscale is the pioneer of compensation intelligence, helping organizations make smarter pay decisions that drive business performance. For more than 20 years, Payscale has combined trusted market data with AI-powered technology to deliver actionable insights that turn pay from a cost into a catalyst for growth. The Payscale Intelligence Cloud portfolio of solutions — Ascent, JobNav, and Paycycle — empower top companies and businesses like Cintas, Leidos, Chipotle, Ohio State University, and TJX Companies.
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