How Much Salary Hike to Expect in Indian Startups in 2025? Real Trends & Data Inside

Wondering about your next salary hike in a startup? This guide reveals 2025 trends, actual hike data, company comparisons & expert analysis to help you prepare for your next appraisal confidently.

Expected Salary Hike Percentage in Indian Startups — Trends & Insights

The expected salary hike percentage in Indian startups has become one of the most searched career-related topics in 2025—and for good reason. With the Indian startup ecosystem evolving rapidly amid shifting economic dynamics, salary growth expectations are changing just as fast. Founders, HR professionals, and jobseekers alike are keen to understand where things stand this year—and what the future may hold.

This guide is designed to give you a clear, data-backed, and up-to-date view of salary hike trends across Indian startups, including historical patterns, projections for 2025, and practical insights to help you prepare and negotiate better.

Historical Salary Hike Trends in Startups (2020–2023)

To understand what 2025 might look like, it’s important to first look at where we’ve come from. The period between 2020 and 2023 was marked by pandemic recovery, startup funding booms, and then a significant correction across global markets. These fluctuations directly influenced compensation structures across Indian startups.

Here’s a snapshot of average annual salary hikes across startups in the last few years:

Sources: Aon India Report, Naukri JobSpeak, CIEL HR.

In 2021–22, well-funded startups offered massive hikes to attract tech talent. However, as the funding landscape tightened in 2023, most startups adopted a more conservative approach. Some even resorted to salary freezes, deferred hikes, or variable pay adjustments.

While a few late-stage startups and unicorns managed to sustain competitive hikes, early-stage startups struggled to maintain growth-linked compensation. The shift laid the foundation for a more value-conscious hiring trend that continues into 2025.

2024–25 Forecast: What Founders & Reports Say

So, what is the expected salary hike percentage in Indian startups for 2025?

Recent reports suggest a mixed yet slightly optimistic picture. According to a survey by Inc42, nearly 39% of Indian startups are planning 10–20% salary hikes in FY2025–26, driven by improved hiring confidence and gradual funding recovery. However, 63% of founders still foresee salary increments remaining flat, citing continued margin pressure and cautious spending.

Further insights from Economic Times reveal that most startup sectors are offering an average hike between 6–10%, depending on role, funding stage, and profitability.

Interestingly, there’s a growing preference for non-cash compensation like ESOPs, retention bonuses, and long-term incentives to balance fixed costs with employee engagement.

In 2025, startups that:

• Recently raised Series A or higher funding,
• Operate in hot sectors (AI, fintech, climate tech),
• Or have low attrition rates

are the most likely to offer double-digit hikes. Others remain conservative, with average salary increments expected to stay within 8–12%.

Hike Variation by Startup Stage

Not all startups offer the same compensation growth. The expected salary hike percentage in Indian startups varies significantly depending on the company’s stage—whether it’s a newly seeded venture or a late-stage unicorn. Startups at different growth phases follow different compensation strategies based on funding availability, revenue models, burn rates, and talent demands.

Here’s how salary hikes typically vary across startup stages:

In early-stage startups, hikes are often modest or delayed. The focus here is on equity and long-term value creation rather than immediate cash incentives. Founders in these companies often communicate a vision for future wealth via ESOPs, instead of annual appraisals.

By the time startups reach Series B and beyond, hike structures start formalizing. Growth-stage firms begin mimicking corporate practices—introducing yearly appraisals, benchmarks, and more structured compensation models.

According to People Matters, even though startups may face funding stress, growth-stage and late-stage ventures are still expected to lead compensation increases in 2025, particularly in tech and data roles.

Role-Based Hike Insights

Just as company stage influences pay hikes, so too does the job role. Founders and HR professionals are increasingly adopting a skill-based compensation approach—prioritizing functions that drive direct business outcomes or have scarce talent availability.

Here’s a breakdown of average expected hikes across key roles in startups for 2025:

Engineering and product roles remain the most rewarded in startups due to their direct contribution to technology and scalability. With India witnessing an AI-driven hiring push, AI/ML professionals are getting hike offers of 18–22%, especially from well-funded firms. Leadership teams, in contrast, often forgo hikes for strategic runway management or tie compensation to company valuation and milestones.

Meanwhile, business functions like HR, finance, and support roles tend to receive below-average hikes unless directly tied to growth KPIs.

Recent analysis by Moneycontrol highlights that while base salaries are moderately growing, many startups are shifting focus toward outcome-based variable bonuses and stock options to reward critical roles.

Location Matters: City-Wise Variations in Salary Hike Trends

Geography continues to be a major factor in determining the expected salary hike percentage in Indian startups. The startup landscape is heavily concentrated in metros like Bengaluru, Mumbai, Delhi NCR, Hyderabad, and Chennai—each with its own compensation dynamics. Startups based in these cities typically offer higher increments than their counterparts in Tier-2 and Tier-3 cities, driven by intense talent competition and cost-of-living differences.

Here’s a comparison of expected average hikes by location in 2025:

Bengaluru leads the chart, not just in terms of hike percentage but also in offering stock options and aggressive retention packages. Many engineering and product candidates in the city receive counteroffers or join new startups with 30–40% hike offers, especially during high-demand cycles.

In contrast, startups in Tier-2 cities like Jaipur, Indore, and Coimbatore are more conservative in their approach. The cost advantage allows them to maintain tighter salary structures while focusing on long-term employee development rather than short-term financial incentives.

A report by TeamLease Services notes that remote-first startups with distributed teams are attempting to standardize hike policies across geographies, but metro cities still command a premium.

Funding Stage & Investor Pressure on Compensation

The expected salary hike percentage in Indian startups is often influenced not just by internal strategy but also by external investor expectations. Startups backed by top VCs or preparing for a funding round typically face pressure to optimize their burn rate. This directly impacts annual appraisal policies.

Here’s how funding rounds shape salary decisions:

• Seed to Series A: Hikes are highly selective and often deferred until post-funding.
• Series B–C: Structured appraisals begin; investors push for stable retention metrics.
• Late Stage (D and beyond): Hikes aligned with industry benchmarks; institutional investor oversight tightens control over headcount cost.

During funding slowdowns, investors tend to emphasize lean operating models, where pay hikes may be minimal unless tied to performance or milestone achievements.

According to a recent Livemint article, over 50% of startups undergoing mid-stage funding rounds have reduced their appraisal budgets for 2025. Instead, they are increasingly shifting toward milestone-based bonuses, ESOP vesting acceleration, or quarterly reviews over fixed annual increments.

In essence, while employees often expect a hike every appraisal cycle, the investor’s stance on cost optimization plays a growing role in whether—and how much—startups are willing to offer.

Beyond Salary Hikes: The Role of ESOPs, Culture & Retention

In the world of Indian startups, the expected salary hike percentage tells only part of the story. Increasingly, startups are focusing on total compensation rather than just fixed annual increments. For many employees, the real value comes from ESOPs (Employee Stock Option Plans), flexible work environments, retention bonuses, and fast-track growth opportunities.

Here are three key components reshaping startup compensation in 2025:

A. ESOPs Gaining Center Stage

With cash flow often limited, startups are using ESOPs to reward and retain talent. According to YourStory, more than 60% of funded startups in India have formalized their ESOP policies, with better clarity around vesting schedules, buyback plans, and exit strategies.

Key trends in ESOPs:

• Early vesting (as low as 1 year) to attract key hires.
• Buyback programs in growth-stage startups to reward long-timers.
• Transparent communication about valuation and equity dilution.

Employees, especially those in product and engineering roles, are increasingly evaluating long-term wealth creation from ESOPs alongside their annual pay hikes.

B. Culture & Career Growth as Retention Tools

Startup employees often value growth opportunities and team culture as much as monetary benefits. Companies that cannot offer high hikes in 2025 are doubling down on:

• Leadership exposure and role expansion
• Flexible work-from-anywhere policies
• Faster internal promotions and recognition

Many candidates now view career acceleration and meaningful work as key differentiators—even more so than a marginal 2–4% difference in annual hike.

As highlighted by Harvard Business Review, transparent leadership, mission alignment, and professional development are among the top reasons employees stay longer—even when base hikes are modest.

C. The Shift Toward Variable and Retention Bonuses

With funding cycles getting longer and predictability in burn becoming critical, startups are moving toward variable compensation models. Instead of flat annual hikes, many now offer:

• Performance-linked bonuses
• Retention bonuses for critical team members
• Equity refreshers after key milestones

This helps startups manage cash flow while still motivating top performers. However, the success of this model depends on clarity, fairness, and timely disbursal—areas where some startups still struggle.

How Much Is “Enough”? Employee Sentiment Around Hikes

While 6–10% may seem average for the expected salary hike percentage in Indian startups, the real question is—does it meet employee expectations?

Surveys by job portals like AmbitionBox and LinkedIn India show that a large portion of startup professionals expect double-digit hikes year-over-year, especially after inflation and cost-of-living adjustments. When those expectations aren’t met, attrition risk rises—particularly among mid-level tech and business professionals.

A growing trend is employees evaluating offers based on blended compensation:

• Cash hike
• ESOP value (vested vs unvested)
• Flexibility and learning curve
• Job stability

Candidates are also increasingly comparing startup hike trends with corporate benchmarks, and negotiating for parity in total compensation value, not just salary percentage.

How to Negotiate a Better Salary Hike in a Startup

While startup environments often lack the formal HR structures of large corporations, that doesn’t mean employees can’t push for meaningful raises. In fact, given the agility of most Indian startups, employees who understand their value and communicate effectively can negotiate a higher-than-average salary hike percentage.

Here are some proven strategies:

A. Know Your Market Worth

Before entering any salary discussion, employees should research current compensation benchmarks across roles, cities, and company stages. Websites like Payscale and Glassdoor offer reliable, up-to-date data points.

Having credible figures can help anchor the discussion around objective data, especially if your role is in high demand—like data science, full-stack development, or product management.

B. Highlight Impact, Not Just Tenure

Startup founders value performance that aligns with growth. Employees seeking hikes should avoid making the conversation solely about the time spent in the company and instead focus on:

• Metrics improved (e.g., conversions, uptime, customer retention)
• Key projects delivered
• Cost-saving initiatives
• Ownership of critical modules or accounts

Making your achievements quantifiable helps justify a double-digit hike request, especially if the company is scaling.

C. Understand the Business Context

Not all startups are in the same financial health. Timing your negotiation post-funding rounds or during planning cycles can improve outcomes. Knowing whether the company is in a cost-optimization phase or expansion mode also sets realistic expectations.

According to ET HRWorld, professionals who align their hike expectations with company goals see greater success in negotiating better compensation without resistance.

What Founders and HR Leaders Can Do Differently

For startup leaders, balancing compensation with runway management is always a tightrope walk. But ignoring employee expectations around the expected salary hike percentage in Indian startups can lead to high attrition, broken morale, and a loss of critical talent.

To strike the right balance, here are some tactical approaches:

A. Build Transparent Appraisal Frameworks

Even in a startup’s early phase, setting up clear appraisal timelines, evaluation criteria, and salary bands helps prevent ambiguity. When employees know how their hike is calculated, they are less likely to feel undervalued.

Frameworks should include:

• Defined cycles (annual, biannual)
• Graded performance metrics
• Transparency around bell curves, if used
• Communication of company’s financial ability to give hikes

B. Use ESOPs and Non-Monetary Incentives Strategically

If liquidity is a challenge, founders can offer early ESOP vesting, promotion-linked bonuses, and leadership opportunities as part of total compensation. These strategies work best when backed by education and real success stories—helping employees see long-term value.

Startups like Zerodha and Razorpay have made headlines for designing thoughtful, founder-friendly ESOP programs that align employee incentives with long-term vision.

C. Retention-Focused Budget Planning

Proactively identifying high-performers and budgeting for their retention—through mid-year bonuses, performance-linked incentives, or even equity refreshers—reduces the cost of rehiring and improves team stability.

As per India Today, retention strategies backed by data and empathy are becoming critical to sustainable growth in Indian startups.

What to Expect in 2025 and Beyond

As we look ahead, the landscape for expected salary hike percentage in Indian startups is set to evolve with several macro and microeconomic factors. The convergence of AI adoption, digital transformation, and global funding realignments will have a strong influence on how Indian startups manage compensation over the next few years.

A. Macroeconomic Influences

India’s startup economy is growing steadily despite global headwinds. According to NASSCOM, over 1,400 new tech startups were launched in 2024, indicating a robust environment for talent demand. With interest rates stabilizing and funding cycles expected to regain momentum by mid-2025, startups may become more aggressive in hiring and retaining talent.

However, inflation and currency fluctuations may keep salary hikes more conservative in Q1–Q2 of the year, especially in seed and pre-Series A stage startups.

B. Demand for New-Age Skills

Startups working in AI/ML, cybersecurity, green tech, and fintech are likely to offer higher salary hike percentages to attract top-tier talent. Roles such as data engineers, prompt engineers, AI product managers, and sustainability officers are already seeing above-average increment rates—sometimes upwards of 20–25% for skilled mid-level professionals.

This trend is supported by reports from Michael Page India, which indicate that niche skills combined with startup experience will fetch premium compensation in both Indian and global startup ecosystems.

C. Shift Toward Hybrid Compensation Models

The traditional model of fixed annual increments is steadily being replaced by dynamic, hybrid compensation strategies. These may include:

• Project-based bonuses
• Quarterly micro-appraisals
• Equity-based rewards
• Outcome-tied compensation for remote or contract-based roles

This shift favors startups that are performance-driven and transparent. Employees benefit by being rewarded more frequently and based on real contributions.

Final Thoughts: Preparing for the New Normal

Whether you’re a job-seeker evaluating a startup offer or a founder designing your company’s compensation strategy, understanding the expected salary hike percentage in Indian startups is more critical than ever. But more importantly, the conversation must evolve beyond just numbers.

Here’s how both sides can prepare:

The most successful startups will be those that can retain top talent without burning capital, and the most satisfied employees will be those who can evaluate offers holistically rather than focusing solely on yearly increments.

Expected salary hike percentage in Indian startups may vary from company to company, but one thing is certain—the conversation around it is changing. Transparency, performance, and adaptability are replacing legacy models. Those who keep pace with this evolution will thrive in the fast-moving Indian startup world.

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