Appraisal 2026: Will Your Appraisal Meet Expectations? EY India Shares Salary Hike Outlook For The Year

Appraisal 2026: The average salary increment across the Indian workforce is projected to be around 9.1% this year, as organisations increasingly shift towards skill-based pay frameworks.

Sectors such as e-commerce, financial services, professional services and global capability centres are likely to see above-average hikes. In contrast, industries including entertainment and media, oil and gas, and metals and mining may witness comparatively lower increments during the appraisal cycle of the year 2026, according EY report titled 'Future of Pay'.

The report highlights that the country's compensation landscape is slowly and steadily shifting from role-based to skill-based models. Nearly 45-50% of organisations, surveyed in the report, are shifting to skill-based pay frameworks. Whereas, emerging tech roles like AI, generative AI, machine learning, engineering, etc can lead to upto 40% skill base premium.

Quarterly Variable Pay Cycles Gain Traction

Nearly 28% of organisations, included in the survey, adopted quarterly variable pay cycle to ensure performance-based remuneration. The variable pay cycles is widely adopted in sales-driven roles, and nearly 35% of organisations link 5-15% of their leadership variable pay to ESG metrics, as per EY report.

Appraisal 2026 : Sector-Wise Salary Appraisal Expectations

The average increment percentage for the year 2026 is likely to see a marginal decline to 9.1%, from 9.3% recorded in 2025, and 9.4% recorded in 2024, as per EY report.
Jobs linked to e-commerce sector may see a salary hike of around 10.1% in the year 2026. Whereas, jobs in the financial services, engineering and manufacturing, chemicals, and automotive industries may see an appraisal of around 10%, 9%, 8.6%, and 8.9% respectively.

Sector	2024 (A)	2025 (A)	2026 (P)
E-Commerce	10.9	10.1	9.9
Financial Services	10.1	10.0	10.0
Professional Services	10.0	9.6	9.4
Global Capability Centers	10.0	10.2	10.4
Engineering/Manufacturing	9.9	9.7	9.0
Hi-Tech/Information Technology	9.8	9.4	9.2
Chemicals	9.7	8.8	8.6
Automotive	9.7	9.2	8.9
Lifesciences/Pharmaceuticals	9.6	9.6	9.7
FMCG/FMCD	9.5	9.2	9.0
Real Estate/Infrastructure	9.5	9.0	8.9
Telecommunications	9.3	8.8	8.4
Metals and Mining	9.2	8.7	8.5
IT Enabled Services	9.2	9.0	8.7
Oil & Gas	9.1	8.8	8.5
Entertainment & Media	9.0	8.7	8.6

India's New Labour Code Prompting Firms To Reassess Wage Structure

India's new labour codes are prompting organisations to reassess wage structures and statutory obligations. As per the report, organisations are now conducting modeling exercises, upgrading payroll systems, and preparing structured communication strategies to manage employee impact. The Union Budget 2026's focus on workforce competitiveness through tax stability, skilling investments, digital infrastructure incentives, etc will also impact the salary hike trend across industries.

India's corporate pay trends steadied in 2025, as average salary increments eased to 9.3%. Increments slip further to 9.1% in 2026, highlighting tighter cost discipline and more realistic salary budgets across many organisations.

Within this broader moderation, GCC salary increments stay the highest, touching 10.4% in 2026. Persistent global demand and limited specialist talent keep GCCs ahead, while Financial Services keeps raises near 10% through steady spending on digital, compliance and risk systems.