- Compa-Ratio = Employee Pay ÷ Reference Pay
- Compa-Ratio (%) = Compa-Ratio × 100
- Employee Pay is base pay or total cash, based on your selection.
- Reference Pay can be a range midpoint, market median, or custom benchmark.
- Adjusted Reference = Reference × (1 + Adjustment%)
- Pick the pay frequency and enter base pay in that frequency.
- Add annual incentives, allowances, or annualized equity if needed.
- Enter the benchmark reference pay using the same frequency.
- Apply an adjustment percent for location or policy differences.
- Click Calculate to see ratio, gaps, and a planning target.
- Export the summary using CSV or the PDF buttons.
| Employee | Base Pay (Annual) | Reference (Annual) | Compa-Ratio | Interpretation |
|---|---|---|---|---|
| Hassan | PKR 1,500,000 | PKR 1,800,000 | 0.8333 | Below |
| Sana | PKR 1,950,000 | PKR 1,800,000 | 1.0833 | Within |
| Bilal | PKR 2,250,000 | PKR 1,800,000 | 1.2500 | High |
Pay positioning signal in one number
Compa-ratio expresses how an employee's pay compares to a defined benchmark. A ratio of 1.00 means pay equals the reference, 0.90 means 10% below, and 1.10 means 10% above. Many organizations watch bands such as <0.80 (low), 0.80-0.89 (below), 0.90-1.10 (within), 1.11-1.20 (above), and >1.20 (high) to flag follow-ups.
For hourly roles, annualize pay using hours per week and 52 weeks to keep comparisons consistent. When pay changes midyear, use the current run rate for positioning, then document effective dates for auditability. Treat compa-ratio as directional, not a verdict in review meetings.
Selecting the right reference benchmark
The ratio is only as good as the reference pay you choose. Common references include the salary range midpoint, a market median from surveys, or an internal benchmark for a unique role. This calculator also lets you apply a percentage adjustment, useful for location differentials or policy premiums. For example, a 12% adjustment turns a PKR 1,800,000 benchmark into PKR 2,016,000.
Base pay versus total cash comparisons
Some decisions require comparing base pay only, while others require total cash. Total cash typically combines base pay plus annual bonus and fixed allowances; you can also add annualized equity for planning. Using total cash can prevent underestimating competitiveness for roles where incentives are material. Keep inputs consistent: enter base and reference in the same frequency, then treat incentives as annual amounts.
Using gaps to plan adjustments and budgets
Beyond the ratio, the most actionable output is the gap. If adjusted reference is PKR 2,016,000 and annual base is PKR 1,800,000, the annual gap is PKR 216,000. Converting that gap into the selected pay period helps payroll planning: monthly equals PKR 18,000, biweekly equals PKR 8,307.69, and weekly equals PKR 4,153.85. A target ratio (often 1.00) turns benchmarking into a measurable pay action.
Governance, equity, and review cadence
Use compa-ratio alongside performance, scope, and internal equity. A high ratio might be justified by scarce skills, expanded responsibilities, or prior retention actions. A low ratio may indicate a leveling mismatch or a missed adjustment cycle. Review ratios at least annually, and more often during rapid hiring, market shifts, or organizational redesigns.
Many teams target 0.90-1.10 around their benchmark. Policy can differ by level, scarcity, and performance. Use bands to trigger review, not to auto-decide pay.
Use base pay for range governance and internal equity. Use total cash when incentives are a meaningful part of pay and you want a full competitiveness view.
Common references are range midpoint, market median, or a custom benchmark for specialized roles. The reference should match the job level and scope you are evaluating.
Adjustments help reflect location differentials, shift premiums, or policy add-ons. Apply the percent to the benchmark so comparisons stay consistent across sites or groups.
A negative gap means the employee pay used in the ratio is above the adjusted reference. Confirm job scope, performance, and internal peers before deciding on future increases.
Yes. Enter hourly pay and hours per week so the calculator annualizes pay for an apples-to-apples comparison. Keep the reference in the same frequency you select.