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Australian Salary Outlook 2026 

Salary increase budgets edge lower amid soft labour market; short-term incentives remain key performance rewards

More than 1,300 organisations participated in Mercer’s 2025 Total Remuneration Survey (TRS) Australia. The results reveal that employer hiring intentions have fallen to their lowest point in five years. The weaker labour market could lead to conservative salary increases as overall salary budgets are forecast to decline to 3.5% in 2026.

Merit budgets remained stable in 2025 as employers are continuing to leverage short-term incentives as a key tool to reward performance and boost take-home pay.

Download to discover:

  • Salary budgets forecast and salary movements by job families
  • Short-term incentive forecasts
  • Hot jobs of 2025
  • Employers' hiring intentions and employee turnover trends
  • Remuneration trends for 2026

Salary trends

Salary increases, already modest in 2024, further declined in 2025 across most job families. With overall salary budgets forecasted to decrease again in 2026, employers are expected to continue a cautious approach to salary adjustments.
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This content has been prepared by Mercer Consulting (Australia) Pty Ltd (MCAPL) ABN 55 153 168 140. MCAPL is a wholly-owned subsidiary of Mercer (Australia) Pty Ltd ABN 32 005 315 917 (Mercer Australia). References to Mercer shall be construed to include Mercer Australia and/or its associated companies.

This content is intended to inform clients of Mercer’s views on particular issues. It should not be relied upon or used as a substitute for professional advice specific to a client’s individual circumstances. Information contained on this website has been obtained from third-party sources. While the information is believed to be reliable, Mercer has not sought to verify it independently. Mercer makes no representation as to the accuracy of the information and takes no responsibility for any error, omission or inaccuracy in the information provided by any third party. ‘MERCER’ is an Australian-registered trade mark of Mercer Australia.

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