Salaries in India projected to rise 9% in 2026, led by realty, NBFCs: Aon

Aon study shows salary growth to touch 9% in 2026 as real estate and NBFCs lead the rise, while firms prioritise performance-based pay amid global slowdown

Salaries in India are projected to grow by 9 per cent year-on-year (YoY) in 2026, according to a study by Aon, a leading global professional services firm. The projection marks a marginal rise from the actual 8.9 per cent salary growth recorded in 2025, even as global economic growth slows.

 

“Despite global and local headwinds, India is growing on the strength of sustained economic momentum and moderating inflation. For organisations, this calls for rewards strategies that build workforce agility to capitalise on emerging opportunities,” said Roopank Chaudhary, partner and rewards consulting leader, Talent Solutions, India.

 

India’s salary growth at its lowest in over a decade

   

The projected 9 per cent increase is the lowest growth projected by Aon in the past 15 years, excluding the Covid-affected 2020. The slowdown is attributed to rising costs, top-line pressures, and global uncertainty that began earlier this year.

 

“With salary increases at their lowest in over a decade, organisations are focusing on strategic pay decisions. While overall wage growth is moderating, companies are allocating higher budgets to high performers and niche skill sets. This approach supports retention of critical talent and aligns compensation with evolving business priorities,” said Amit Otwani, associate partner, Talent Solutions, India.

 

The real wage growth (salary increase minus inflation) is projected at 4.9 per cent in 2026, up from the actual 4.7 per cent in 2025.

 

Survey covers over 1,000 companies across 45 industries

 

The study is based on data from over 1,060 companies across 45 industries. About 43 per cent of them have projected a YoY revenue growth of over 10 per cent for FY26, while 27 per cent expect 5–10 per cent growth. Another 12 per cent estimate no impact, 14 per cent see 0–5 per cent growth, and 4 per cent anticipate negative growth.

 

On salary projections, 39 per cent of surveyed firms expect a 9–10 per cent increase in 2026, while 16 per cent foresee an increase of over 10 per cent. Around 30 per cent of companies expect 8–9 per cent growth, and 15 per cent project less than 8 per cent.

 

Real estate and NBFCs to post highest salary increases

 

Sector-wise, real estate and infrastructure and non-banking financial companies (NBFCs) are likely to post the highest salary increases at 10.9 per cent and 10 per cent, respectively. Technology consulting services is the only sector expected to see moderation—from 7 per cent in 2025 to 6.8 per cent in 2026—due to the export slowdown and the growing impact of artificial intelligence.

 

Junior-level employees to see highest pay hikes

 

Salary growth for top/senior and middle management is expected to remain unchanged at 8.5 per cent and 8.9 per cent, respectively. However, firms are expanding salary budgets for junior management—from 9.3 per cent in 2025 to 9.5 per cent in 2026—indicating a focus on attracting and retaining young talent in a competitive market.

 

Attrition at five-year low; involuntary exits rise

 

Attrition in 2025 stood at 17.1 per cent, the lowest in five years. Involuntary attrition, however, rose to 4.6 per cent from 4 per cent in 2023 and 4.3 per cent in 2024.

 

“As overall attrition rates decline, involuntary exits are subtly rising. This shift indicates that organisations are reassessing talent needs and strategically reshaping their workforce, often prioritising new capabilities and performance standards to maintain competitiveness,” Chaudhary added.