A survey shows that 80 percent of Japan's small and mid-sized businesses are planning pay hikes for the new fiscal year starting in April.

The private credit research firm Tokyo Shoko Research said it received 3, 653 responses to its online business survey.

Of the 80 percent that plan pay raises, 76 percent said they will offer regular seniority-based wage hikes.

Forty-nine percent said they are planning a basic wage increase, and 36 percent said they will increase bonuses.

In a previous survey a year ago, 70 percent said they were planning pay hikes. Of those, 32 percent said they would offer basic wage increases. This year both figures are higher than a year ago.

Asked about rates of wage increase, 29 percent said they are planning hikes of 5 percent or more. In the previous survey, only 8 percent were considering such rates.

Sixty-one percent said they will give a 2 to 5 percent raise, while 9 percent said they are planning hikes of less than 2 percent.

The survey also asked firms that are not planning wage hikes about their reasons. Many cited a surge in prices of raw materials, as well as a failure to shift rising costs to the prices of goods and services.

In this year's annual wage negotiations, Japan's largest labor organization, Rengo, has demanded a pay hike of around 5 percent.

A focal point is whether this trend will grow among small and mid-sized firms, which account for 70 percent of Japan's workforce.

Tokyo Shoko Research says the momentum for wage hikes is increasing compared to last year. But it says the move is largely an effort to protect employees' livelihoods amid rising prices, rather than a result of business recovery.

It adds that payroll hikes put a heavy burden on small and mid-sized firms and that support will be needed to shift rising costs and improve productivity.