Will you get a pay rise this year? Here’s what the experts say

Tuesday, 5 May 2026

There’s a widening gap between what Kiwi workers expect — and what’s actually coming.

With inflation, especially fuel costs, still chewing through pay packets, it’s no surprise expectations are high: 83% of New Zealanders say they expect a pay rise in the next year.

But the reality is far less generous. Only half of workers received a pay rise last year, according to a Seek survey of more than 1000 people. And for most, the increase was modest at best.

More than 90% of pay rises came from existing employers — largely driven by minimum wage increases and broad, inflation-linked adjustments rather than individual bargaining power.

Even then, nearly three-quarters of increases were 5% or less, says Seek career coach Leah Lambart — a marginal gain at a time when rising costs continue to erode spending power.

The result: frustration.

Six in ten Kiwis say they’re unhappy with their salary. Yet fewer than one in three feel confident enough to ask for more.

It points to a deeper problem. Kiwis don’t like talking about money — even when the numbers stop adding up.

But given that your income is likely to be your biggest wealth generator, it’s something that is worth tackling.

Will the market improve?

The employment market has been tough in recent years, with the current unemployment rate 5.4% – well above Australia’s 4.3%.

New labour statistics will be released this week, but major banks don’t expect a significant shift.

Kiwibank chief economist Jarod Kerr says

it’s still too early to tell the full impact of the conflict in the Middle East on our labour market, but the initial impact is already piling more pressure on both households and businesses.

“Kiwi households are cutting back on spending where they can,” Kerr says in a forecast released this week.

“The cost of essentials like electricity, food, rates, and premiums have all gone up, and now we have petrol on top. Kiwis have less and less left over at the end of each week to spend on anything non-essential.”

That hits businesses where it hurts, because it simply means Kiwis aren’t spending enough money on items they don’t necessarily need.

“It follows that businesses are cutting back on their own spending, not hiring new staff, not expanding their operations, not giving out bonuses or pay increases,” says Kerr.

Will wages improve?

Westpac senior economist Michael Gordon expects wages to grow around 2% per year, which isn’t even enough to beat inflation right now.

The real impact of the war in the Middle East, says Gordon, is that it will hinder our economic recovery, potentially leading to delays in hiring, more layoffs and business failures.

In fact, Gordon expects unemployment to rise above 5.4% in the coming months before dropping back down.

While there is some life returning to the job market in terms of advertised roles, Gordon notes these numbers still lag behind the post-Covid boom, and employers aren’t quite as eager as they once were to fork out to attract or retain workers.

So what can you do to get a pay rise?

The Seek data shows that over the last 12 months, moves to a different company accounted for only 5% of increases.

However, those who did move were three times more likely to secure a substantial increase of more than 10% than those who stayed.

Lambart says this doesn’t necessarily mean that jumping ship is the best way to get a pay rise – particularly at a time when new roles can be tough to come by.

She notes almost a quarter of workers who received a pay rise did so for performance-based reasons.

Her recommendation is that it can pay to talk openly with your employer about your level of pay, but this requires more than having a whine about how much things cost.

“You shouldn’t bring personal reasons into those conversations,” she says, noting that things like rent or petrol have become more expensive for everyone in the country.

“The conversation around a pay increase should always be tied to the value they're bringing to the organisation.”

She also advises workers to research how much people in their position are earning elsewhere.

Benchmarking your salary against industry standards can serve as persuasive evidence when putting forward an argument for improved pay.

Leah adds an important caveat, noting that employees also have a responsibility to read the room and try to understand what the business is going through.

Businesses, much like households, are also doing it tough, which means some organisations simply aren’t in a position to give pay rises.

The more prepared and considerate you are in your approach, the more likely it is that the employer will take your request seriously.

So what’s your view on the current job market? And what have you done in the past to secure a pay rise? Let us know in the comments section below.