"I got a 10% increment. Is that good or should I look for another job?"
This is one of the most common questions professionals ask, yet most have no clear answer. Your manager says 10% is "excellent." Your friend at another company got 15%. Industry forums mention 20%. Who's right? The truth? What's "good" depends on your industry, experience level, company type, performance, and economic conditions. But there ARE clear benchmarks you can use to evaluate if your salary growth is on track or if you're being shortchanged. This guide gives you the exact numbers to know if you're growing well—or leaving lakhs on the table.
The Short Answer
📊 Good salary growth in India (Annual)
What Affects 'Good'
But this varies significantly by: Experience level (fresher vs 10 years), Industry (IT vs manufacturing), Company size (startup vs MNC), Performance rating, Economic conditions, Job switches vs internal growth. Let's break it down in detail.
Salary Growth by Experience Level
Freshers (0-2 Years). Expected Annual Growth: Minimum acceptable 10%, Good 15-20%, Excellent 20-30%. Why higher: Steep learning curve, Quick skill development, Low base salary (easier % growth), High mobility (easy to switch). Reality Check: Year 1 ₹5 LPA Year 2 ₹6 LPA (20% growth) ✓ Good. Year 3 ₹7.5 LPA (25% growth) ✓ Excellent. Red flag: If you're getting <10% as a fresher, you're in the wrong company.
Early Career (3-5 Years)
Expected Annual Growth: Minimum acceptable 10%, Good 12-18%, Excellent 18-25%. Why still high: Building expertise, Taking on more responsibility, High demand period, Career acceleration phase. Target by Year 5: Starting salary ₹6 LPA, Good growth (15% CAGR) ₹12 LPA (2x), Excellent growth (20% CAGR) ₹15 LPA (2.5x). Red flag: If you haven't doubled your starting salary by Year 5, you're growing too slowly.
Mid-Career (6-10 Years)
Expected Annual Growth: Minimum acceptable 8%, Good 10-15%, Excellent 15-20%. Why it moderates: Higher base salary (harder % growth), Fewer job switches (more stability), Specialized roles (limited movement). Target by Year 10: Starting salary ₹6 LPA, Good growth (12% CAGR) ₹19 LPA (3.1x), Excellent growth (15% CAGR) ₹24 LPA (4x). Red flag: If you're getting <8% consistently, you're losing to inflation.
Senior Career (11-15 Years)
Expected Annual Growth: Minimum acceptable 8%, Good 10-12%, Excellent 12-18%. Why it slows: Very high base salary, Leadership positions (limited roles), Peak earning years (law of diminishing returns), More stability than growth focus. Target by Year 15: Starting salary ₹6 LPA, Good growth (11% CAGR) ₹30 LPA (5x), Excellent growth (13% CAGR) ₹38 LPA (6.3x). Red flag: If you're at same salary for 2+ years, you've plateaued.
Very Senior (15+ Years)
Expected Annual Growth: Minimum acceptable 5-8%, Good 8-10%, Excellent 10-15%. Why it's lowest: Extremely high base (CXO levels), Limited roles available, Variable pay component higher, Focus on wealth building outside salary. Reality: At ₹1 crore CTC, even 8% = ₹8 lakhs increment (substantial in absolute terms).
Salary Growth by Industry
IT/Software/Tech, Annual Growth Expectations: 0-3 Years 15-25% (High demand, Frequent job switches, Skill-based growth, Startup culture). 4-8 Years 12-20% (Senior developer/lead roles, Architectural positions, Product management). 9+ Years 10-15% (Management/CTO track, Still higher than most industries). What's Good: First 5 years <15% is below market, 5-10 years <12% is below market, 10+ years <10% is below market. Job switch premium: 30-50% (higher than other industries).
Banking & Financial Services
0-3 Years: 10-15% (Structured increments, Hierarchy-based, Performance-linked). 4-8 Years: 12-18% (AVP/VP levels, Bonus component increases). 9+ Years: 10-15% (Director/MD levels, Variable pay dominates). What's Good: First 5 years <10% is below market, 5-10 years <12% is below market, 10+ years <10% is below market. Job switch premium: 25-40%.
Consulting (MBB, Big 4, etc.)
0-3 Years: 15-20% (Analyst/Consultant levels, Rapid progression, High attrition = faster growth). 4-7 Years: 15-25% (Senior Consultant/Manager, Client-facing roles, High performance premium). 8+ Years: 12-20% (Partner track, Significant variable component). What's Good: Consulting pays premium for retention. <15% any level = time to switch. Job switch premium: 40-60% (highest).
Manufacturing / Core Engineering
0-3 Years: 8-12% (Slower more stable, Engineering track, Traditional industries). 4-8 Years: 10-15% (Senior Engineer/Manager, Project leadership). 9+ Years: 8-12% (GM/VP levels, Established hierarchy). What's Good: First 5 years <8% is below market, 5-10 years <10% is below market, 10+ years <8% is below market. Job switch premium: 20-30% (lowest).
Startups (Funded)
Depends on stage: Seed/Series A 10-15% (cash-strapped), Series B/C 15-25% (scaling fast), Pre-IPO 20-30% (retention mode). Stock component: Can add 20-100%+ if company does well. What's Good: Startups should compensate cash + equity. If equity value grows 2-3x, total comp can be 50-100%+ annual growth. High risk high reward: Either 40%+ growth or layoff.
Government / PSU
All levels: 5-8%. Fixed pay scales, Grade-based increments, Very predictable. What's Good: Government jobs 5-8% is normal and acceptable. Job security compensates for lower growth. Pension benefits add to total value. Job switch premium: Minimal (grade-based).
Salary Growth by Performance Rating
Outstanding/Exceptional (Top 5-10%), Expected Increment: IT/Tech 18-25%, Banking 15-20%, Consulting 20-30%, Manufacturing 12-18%. Includes: Base increment, Performance bonus, Promotion (if applicable). If you're 'outstanding' but getting <15%: Your company's rating system is broken or they're underpaying top talent.
Exceeds Expectations (Top 20-30%)
Expected Increment: IT/Tech 12-18%, Banking 12-15%, Consulting 15-20%, Manufacturing 10-15%. If you're 'exceeds' but getting <10%: Time to explore market options.
Meets Expectations (50-60% of people)
Expected Increment: IT/Tech 8-12%, Banking 8-10%, Consulting 10-15%, Manufacturing 8-10%. What's concerning: If 'meets expectations' gets <8%, inflation is eating your salary growth.
Needs Improvement (Bottom 10-20%)
Expected Increment: All Industries 0-5%. Reality: If you're in this bucket consistently, Either improve performance, Or switch companies (fresh start). Don't stay and stagnate at 0-3% growth.
The Inflation-Adjusted Reality
Critical concept: Nominal growth ≠ Real growth. Formula: Real Growth % = Nominal Growth % - Inflation %. India Inflation (Historical): 2020-2021 6.2%, 2021-2022 5.5%, 2022-2023 6.7%, 2023-2024 5.4%. Average ~6%. What this means: Scenario 1, Nominal 8%, Inflation 6%, Real 2% (barely keeping up). Scenario 2, Nominal 12%, Inflation 6%, Real 6% (actual purchasing power increase). Scenario 3, Nominal 5%, Inflation 6%, Real -1% (losing purchasing power!). The Benchmark: <3% real poor, 3-6% real good, 6-10% real excellent, >10% real exceptional. Rule: Always calculate real growth. If real growth <3% for 2+ years, take action.
Job Switch vs Internal Growth
Internal Annual Increment, Typical ranges: Poor company 5-8%, Average company 8-12%, Good company 10-15%, Exceptional company 15-20%. Limited by: Budget constraints, Bell curve distribution, Hierarchy considerations. Maximum realistic: 20-25% (even for top performers). Job Switch Salary Jump, Same level different company 25-35%, Same level better company 30-40%, One level up 35-50%, Two levels up (rare) 50-70%. Why so much higher: No internal constraints, Paying for outside expertise, Market competition, Hiring budget vs retention budget. The Math: Stay 3 years with 10% annual ₹10L → ₹13.3L. Switch after 1 year with 35% jump ₹10L → ₹13.5L (already ahead!) Then grow at 10% for 2 more years → ₹16.3L. 3-year result: Internal growth ₹13.3L, Switch strategy ₹16.3L. Difference ₹3L (23% more!). Strategic conclusion: For maximum growth, switch every 2-3 years in your 20s and 30s.
When Your Growth is Below Market
What <8% Annual Growth Means, Scenario: You 7% annual growth, Inflation 6%, Real growth 1%. Over 10 years: Your salary ₹10L → ₹19.7L, Peer at 12% growth ₹10L → ₹31L. You lost ₹11.3L over 10 years. Impact: Lower savings, Lower SIP amounts, Lower retirement corpus, Less wealth overall. Action Required: Switch jobs or demand better increment. What 15%+ Growth Means, Scenario: You 15% annual growth, Inflation 6%, Real growth 9%. Over 10 years: Your salary ₹10L → ₹40.5L, Peer at 8% growth ₹10L → ₹21.6L. You gained ₹18.9L over 10 years. Impact: Faster wealth building, Can afford better lifestyle, Earlier retirement possible. How to achieve: Strategic job switches + high-growth industry + good performance.
Red Flags: When to Switch Jobs
- Red Flag 1: Below 8% for 'Good' Performance: If your company says you're doing well but gives <8%: They're either lying about your performance Or they don't value good performance. Either way: Leave.
- Red Flag 2: Same Increment as Poor Performers: If top 10% and bottom 50% get same 8-10%: Bell curve is broken, No incentive to excel. Leave (your excellence is wasted here).
- Red Flag 3: Below Industry Average for 2+ Years: Check market: Your industry avg 12%, Your increment 8%, Been 2 years at 8%. You've lost ₹lakhs already, leave now.
- Red Flag 4: Promotion Without Salary Bump: Got promoted but title changed, responsibilities increased, salary increased only 8-10%? Fake promotion, leave. Real promotion = 20-30% minimum salary increase.
- Red Flag 5: 'Market is Down' Excuse for 3+ Years: If your company uses 'Economic slowdown' (every year), 'Company budget constraints' (always), 'Next year will be better' (never is). They're using excuses, leave.
How to Negotiate Better Growth
- Strategy 1: Come Armed with Data: Don't say 'I deserve 15%'. Say 'Market data from Glassdoor/AmbitionBox shows professionals at my level get ₹X. I'm currently at ₹Z. To be competitive I need 18% increment to reach market median.' Why it works: Data > feelings.
- Strategy 2: Demonstrate Impact: Don't say 'I worked hard'. Say 'I led project X that generated ₹1 crore revenue. I reduced costs by ₹30L in Y. I improved efficiency by 40% in Z. My contributions are worth 20% increment.' Why it works: Impact > effort.
- Strategy 3: Create Competition: Don't say 'Give me raise or I'll leave' (threat). Say 'I have another offer at ₹X (15% higher). I prefer staying here because [reasons], but I need you to match 80% of that gap.' Why it works: Genuine options > empty threats.
- Strategy 4: Time it Right: Bad timing: After company losses, During layoffs, Random Tuesday. Good timing: After major project success, During appraisal cycle, When you have competing offer.
- Strategy 5: Be Willing to Walk: Reality: Companies rarely give >15% internal increments. If market offers 30-40% more and they won't match: Take the market offer. Loyalty doesn't pay bills. They'll replace you in 2 weeks.
Industry-Wise 'Good' Benchmarks Summary
📊 Use this table: Find your industry + experience, Compare your actual growth, Below benchmark? Take action.
What 'Good' Means for YOU
- Scenario 1: Fresh Graduate in Tier 2 City: Got 8% increment, Market 10-12%, Tier 2 city 10-15% lower salaries. Verdict: Acceptable.
- Scenario 2: 5-Year IT Pro in Bangalore: Got 10% increment, Market 15-18%, High-demand skills. Verdict: Below market, switch.
- Scenario 3: 15-Year Banking VP: Got 8% increment, Market 8-10%, High base (₹50L+). Verdict: Good.
- Scenario 4: Startup Employee with ESOPs: Got 10% cash increment, ESOPs worth 2x annual salary (if company exits). Verdict: Potentially excellent (if exit happens). Context matters: Location, company size, total comp, job satisfaction, work-life balance, learning opportunities.
Key Takeaways
- Universal baseline: <8% is poor, 8-12% is average, 12-15% is good, 15%+ is excellent
- Experience matters: Freshers should get 15-20%, senior professionals 8-12%
- Industry matters: IT/Consulting expect 15%+, Manufacturing 8-12% is normal
- Real growth = Nominal - Inflation: Always calculate the inflation-adjusted number
- Job switches beat internal growth: 30-40% jump vs 10-12% increment
- Red flag: Below industry benchmark for 2+ years = you're losing lakhs
- Performance rating matters: 'Outstanding' should get 18-25%, not 10%
- Context is key: Consider location, company stage, total comp, not just cash increment
- Data beats emotion: Use market data in negotiations, not 'I deserve'
- Be willing to switch: Companies prioritize hiring budget over retention
Final Reality Check
- 1. Is my annual growth ≥8%? No → You're losing to inflation
- 2. Is my growth ≥ my industry benchmark? No → You're below market
- 3. Am I in top 20% performers but getting average increment? Yes → Your company doesn't reward excellence
- 4. Have I been <10% growth for 2+ years? Yes → You've already lost ₹lakhs
- 5. Could I get 30%+ by switching? Yes → What are you waiting for?
- If you answered No to Q1-2 or Yes to Q3-5 → Update resume this weekend, Start interviewing next week, Switch within 3 months. Life is too short to accept below-market salary growth.
Final Thoughts
It's not one-size-fits-all. Context matters: Location (tier 1 vs tier 2), Company size (MNC vs SME), Total compensation (cash + stock + benefits), Job satisfaction, Work-life balance, Learning opportunities. But if you're consistently below benchmark, the data is clear: switch.
Need Help?
Want to track if your salary growth is on track? Use our Salary Growth Calculator to benchmark against industry standards. Or analyze your complete compensation with our Total Compensation Calculator.
Disclaimer
Salary growth varies by individual performance, company, industry, and market conditions. The benchmarks provided are indicative averages based on market data. Actual growth may differ. This guide is for educational purposes only.