How to Negotiate Pay When There Is No Budget for Raises This Year
"There's no budget for raises this year" sounds like a sentence about money. It is usually a sentence about one line of a compensation budget: the merit pool, the across-the-board percentage everyone gets at review time. Most companies keep several other pay lines that a merit freeze does not touch, such as a promotion budget, a market adjustment pool for people paid below range, retention money for people the company cannot afford to lose, and one-time bonuses. So when you hear that there is no budget for raises this year, do not argue with the freeze. Accept it, then ask which budget is frozen and which ones are not, and make a case that fits one of the open lines. A request for "a raise" competes with the freeze. A request for a market adjustment, backed by the range for your role, does not.
The freeze lands on everyone at once
A company-wide raise freeze is different from a manager saying no to you. It usually arrives as an all-hands announcement or an email from finance: costs went up, a big customer left, revenue missed plan, so merit increases are paused for the year. Then your one-on-one comes around, and your manager repeats the line before you have said anything.
You will hear it in a few forms:
- "Nobody is getting a raise this cycle. It came from the top."
- "The merit budget is zero. My hands are tied."
- "I'd love to, but finance froze everything until next year."
- "Let's revisit when things improve."
The manager is usually telling the truth about the merit pool. What they are rarely asked, and so rarely say, is whether anything else is still open. Many managers have never seen the full compensation budget themselves. They were told "no raises" and passed it on.
Taking "everything is frozen" at face value
Most people lose this conversation by agreeing too fast. A freeze feels like weather: nobody caused it and nobody can change it, so pushing seems pointless and a little rude. You say "I understand," and a year passes with your pay unchanged while your role grows.
The second way to lose is to fight the freeze itself. "But I've earned it" is true and beside the point. Your manager cannot unfreeze a pool that finance froze, so arguing for an exception to it makes them defend a rule they did not write. The third way is the vague request: "Is there anything at all you can do?" That invites a kind "I'll see," and "I'll see" has no date on it.
Which budgets survive a raise freeze?
A merit freeze stops the routine annual increase. It rarely stops the company from paying to fill a bigger role, fix a pay gap or keep a person it needs. Each of those is usually its own line, approved by different people, and each needs a different case.
| Pay line | Usually frozen with merit? | The case that fits it |
|---|---|---|
| Merit increases (the annual percentage) | Yes. This is the line the freeze names. | None this year. Ask for the date it reopens. |
| Promotion budget | Often not | Your job has changed: new scope, new reports, a level above your title |
| Market or equity adjustments | Often not | You are paid below the range for your role, with the numbers to show it |
| Retention money | Rarely frozen, rarely advertised | Losing you would cost more than keeping you (use with care, and never bluff) |
| One-time bonus | Sometimes | A specific result this year that saved or earned a known amount |
The question that opens all of this is short: "Is the freeze on merit increases only, or on promotions and market adjustments too?" Your manager may not know. That is fine. "Can you find out?" gives them a task with an answer, which is better for both of you than a sympathetic shrug.
Isidore and the Burrowmoor merit freeze
Burrowmoor Pet Foods makes dry and wet pet food at three plants. After an ingredient cost spike, the company announced that merit increases are frozen for 2027. Isidore is a quality assurance lead paid $78,000. Since March he has also run the supplier audit program, which a supplier quality manager ran until she left and was not replaced. Postings for that role in his region list $86,000 to $92,000. Wren, the plant operations director, is his manager. They meet for his review.
The pass that accepts the freeze:
Wren: Before we start, you saw the announcement. There's no budget for raises this year. I hate it, but it's company-wide.
Isidore: Yeah, I figured. I've been doing a lot more since March, though.
Wren: You have, and everyone's noticed. Honestly, you're one of the people I'd fight for.
Isidore: Is there anything you can do at all?
Wren: Not this cycle. Let's revisit when things improve.
Isidore: Okay. Thanks for being straight with me.
Nothing here is wrong in tone, and that is the trap. Isidore mentioned the extra work as a feeling, not as a role, so Wren could only answer with praise. "Anything at all" was too open to say yes to. "When things improve" is not a date, and Isidore left with nothing on record.
The pass that asks which budget:
Wren: Before we start, you saw the announcement. There's no budget for raises this year. I hate it, but it's company-wide.
Isidore: I saw it, and I'm not going to ask you to break it. Can I ask what it covers? Is it merit increases only, or promotions and market adjustments too?
Wren: The email said merit. I don't actually know about the rest.
Isidore: That's the part I'd like to ask about. Since March I've run the supplier audit program, all of it. That was Claudette's job as supplier quality manager, and the role was never backfilled. Postings for that title around here are $86,000 to $92,000. I'm at $78,000.
Wren: So you're doing the manager job at the lead salary.
Isidore: For eight months. I'm not asking for a merit raise. I'm asking whether the title and pay can match the role, either as a promotion or as a market adjustment, whichever line is open.
Wren: I can ask HR about the adjustment pool. I'm not promising a number.
Isidore: Understood. Could we put $86,000 in the request, the bottom of that range, and could I hear back by the end of the month? If the answer is no, I'd like to know which date the merit freeze gets reviewed.
Wren: End of the month is fair. Send me those postings and the audit list today so I'm not paraphrasing you.
The turn is the second line. Isidore agreed with the freeze before he asked about it, so Wren never had to defend finance. His question split "no budget" into specific lines, and the extra work became a named role with a market range attached. He asked for the bottom of that range, which is easy for HR to approve, and he turned "let's revisit" into two dates. Wren asked for the evidence, which means she is now the one carrying his case upstairs.
Say the second line before the real review does it for you.
ConvoSparr lets you rehearse this out loud with an AI manager who opens with the freeze and pushes back, then scores whether you asked which budget was frozen, named your role and range, and left with a date.
Practice the budget question before your next one-on-one
The words are not hard. What is hard is saying them right after a manager has told you, kindly, that nothing can be done. Prepare these before the meeting:
- The scoping question, word for word. "Is the freeze on merit increases only, or on promotions and market adjustments too?" Say it out loud until it sounds curious rather than combative.
- Your role, named and dated. Not "I've been doing more," but the title whose work you took on and the month you started. If nobody held that title, describe the scope in one sentence with a number in it.
- One range from outside. Two or three current postings for the role you are doing, in your area. Ask for the bottom of the range. It is the easiest number for anyone above your manager to approve during a freeze.
- Two dates. When you will hear back on the open line, and when the merit freeze itself gets reviewed.
Be careful with the retention line. Hinting that you might leave can work if it is true and you would actually go. If it is a bluff, a freeze year is exactly when a company may decide to let you. And if you leave the meeting without either date, "no budget for raises this year" tends to become no budget next year too.
Updated Nov 9, 2026
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