HONG KONG, July 27, 2026 — Salary increase budgets in Hong Kong are expected to remain moderate, with employers taking a more measured approach to compensation planning amid persistent cost management pressures and a cautious talent market. This is according to the latest Salary Budget Planning report by WTW (NASDAQ:WTW), a leading global advisory, broking and solutions company.
Hong Kong employers reported actual salary increases of 3.5% in 2026, trailing behind the 3.7% increase in 2025, with the projected increase to edge up to 3.8% in 2027. This places Hong Kong below the APAC average of 4.7% for 2026.
Hong Kong salary budget increase overview
| Key markets | 2025 actual salary increase | 2026 actual salary increase | 2027 projected salary increase |
| APAC average | 4.9% | 4.7% | 4.9% |
| Hong Kong | 3.7% | 3.5% | 3.8% |
The findings point to a stable but cautious compensation environment in Hong Kong. While 35% of employers reported no change in actual salary increase adjustments compared with the prior year’s compensation planning cycle, 34% said budgets were lower and 27% said they were higher in the most recent compensation cycle. Against earlier budgeted projections, nearly half of employers reported no change for 2027 salary increase budget, while 25% said budgets were lower than projected and 9% said they were higher.
“While pay increases remain moderate, organisations are still under pressure to keep rewards competitive for critical roles and high performers. The priority now is to use market data and workforce insights to allocate pay budgets with greater precision.”Brooke LiuManaging Director, Work & Rewards, Hong Kong
“Hong Kong employers are operating in a mature, cost-conscious market where salary budgets are being managed carefully. While pay increases remain moderate, organisations are still under pressure to keep rewards competitive for critical roles and high performers. The priority now is to use market data and workforce insights to allocate pay budgets with greater precision,” said Brooke Liu, Managing Director, Work & Rewards, Hong Kong, WTW.
Compensation budgets continue to be directed more deliberately toward high performers. Employees with the highest performance ratings represented 11.1% of the workforce but received 21.8% of the salary increase budget, indicating that employers are allocating a larger share of pay increases to top talent. By comparison, employees with average performance ratings represented 62.7% of the workforce and received 57.3% of the salary increase budget.
Cost management is the most prominent factor shaping salary budget decisions in Hong Kong, cited by 41.1% of employers. This was followed by anticipated recession or weaker financial results (26.0%), inflationary pressures (23.3%) and concerns over a tighter labour market and/or the need to drive retention (20.5%). These pressures are reinforcing a more selective approach to salary increases, with employers balancing affordability against the need to retain key skills.
Organisations have also taken a variety of total rewards actions including broader emphasis on DEI (34%), improving employee experience (50%) and making changes to their health and wellness benefits (43%), indicating a stronger focus on the full employee value proposition rather than relying solely on salary increases.
“Workforce planning will be a critical factor shaping future total rewards strategies, particularly as only 14.4% of organisations surveyed indicated they plan to add headcount in the next 12 months. As AI adoption gains momentum, employers will need to rethink how rewards are designed and delivered. Targeted compensation reviews, skills-based investment and employee experience initiatives can all help strengthen retention without creating unsustainable fixed-cost pressure,” added Brooke.
About the survey
The Salary Budget Planning Report is compiled by WTW’s Rewards Data Intelligence practice. The survey was conducted from March to May 2026. 34,024 responses were received from companies across 156 countries worldwide. In Hong Kong, 637 organisations responded.
About WTW
At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance.
Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success and provide perspective that moves you.
