Example data table
| Employee ID | Name | Group | Base | Bonus | FTE | Level | Department | Location |
|---|---|---|---|---|---|---|---|---|
| E101 | Ayesha | A | 60000 | 4000 | 1.00 | L3 | Sales | Karachi |
| E102 | Hina | A | 58000 | 3500 | 1.00 | L3 | Sales | Karachi |
| E103 | Sara | A | 52000 | 3000 | 0.80 | L2 | Support | Lahore |
| E201 | Ali | B | 65000 | 4500 | 1.00 | L3 | Sales | Karachi |
| E202 | Usman | B | 61000 | 3800 | 1.00 | L3 | Sales | Karachi |
| E203 | Bilal | B | 54000 | 3200 | 1.00 | L2 | Support | Lahore |
Use “Load example” to copy similar rows into the calculator.
Formula used
- Total compensation used = Base pay + Bonus (if enabled).
- Normalized compensation = Total compensation ÷ FTE (if enabled).
- Pay Equity Ratio (%) = (Group A statistic ÷ Group B statistic) × 100.
- Gap (%) = ((Group B statistic − Group A statistic) ÷ Group B statistic) × 100.
- Segment ratio repeats the same calculation within each Level, Department, or Location.
How to use this calculator
- Define Group A and Group B for your audit scope.
- Add employees with base pay, optional bonus, and FTE.
- Enter Level, Department, and Location for segment analysis.
- Choose mean or median, and set an acceptable ratio range.
- Click calculate to view ratios, gaps, and breakdown tables.
- Export CSV for spreadsheets or download a PDF for sharing.
Pay equity ratio and parity bands
The tool calculates a Pay Equity Ratio as Group A statistic divided by Group B statistic, multiplied by 100. A parity band, such as 95%–105%, helps teams classify results as below range, within range, or above range. Use narrower bands for mature compensation programs and wider bands for early-stage organizations with limited job architecture. Before acting, confirm that both groups represent comparable roles and that pay values share the same time period.
Choosing mean versus median pay
Mean pay reflects overall budget impact because it sums total pay and divides by headcount. Median pay reduces distortion from outliers like retention bonuses or executive pay. For small segments, median can jump when one record changes; for larger segments, it provides a stable parity signal. Many HR teams review both metrics and treat a consistent gap across mean and median as higher confidence.
Compensation scope and normalization
Compensation can be evaluated on base pay only or base plus bonus. When roles include variable pay, including bonus gives a fuller view of earnings. FTE normalization divides compensation by the employee’s FTE value, allowing part-time staff to be compared on an equivalent full-time basis. Standardize inputs by excluding one-time severance or sign-on payments unless your policy defines them as recurring compensation.
Segment analysis for actionable insights
Overall ratios can mask localized gaps. The breakdown tables compute the same ratio within level, department, and location. Prioritize segments with sufficient counts in both groups and similar job families. When a segment is below range, review job leveling, performance ratings, hiring comp, and promotion timing. As a rule of thumb, segments with fewer than five employees per group should be treated as directional and validated with qualitative context.
Reporting, exports, and audit readiness
The calculator generates a record table with total used compensation and normalized pay for each employee. CSV exports support spreadsheet modeling and documentation. The PDF export produces a snapshot of ratios, gaps, and segment results. Store analysis names and notes to preserve scope assumptions, exclusions, and corrective action tracking. For audit readiness, save the input file, the exported summary, and the decision log that explains remediation choices, timing.
FAQs
What does a 100% pay equity ratio mean?
A 100% ratio means the selected statistic for Group A equals Group B. It signals parity for the scoped population, metric, and compensation definition, but it does not explain root causes or legal risk on its own.
Should I compare across different job levels?
Prefer comparisons within the same level, job family, and location. Mixing levels can hide leveling issues and inflate gaps. Use the breakdown tables to isolate segments where roles and expectations are comparable.
When should I include bonus in the analysis?
Include bonus when variable pay is a meaningful portion of earnings or when the policy goal is total cash parity. Exclude bonus if bonuses are irregular, discretionary without clear criteria, or not consistently tracked.
Why normalize compensation by FTE?
FTE normalization converts part-time pay into an equivalent full-time rate, improving comparability. It is helpful when a group has higher part-time representation. Keep raw totals available for budgeting and remediation planning.
How many employees are needed for reliable results?
Larger samples are more stable. As a practical guideline, aim for at least five employees in each group within a segment. Treat smaller segments as directional and validate with job context and comp policy review.
What are common data issues to check first?
Confirm pay periods align, currency is consistent, and duplicate or missing records are removed. Review whether one-time payments are included, verify FTE values, and ensure group labels reflect your audit definition.