Enter salary band inputs
Example data table
This example shows how market data and policy inputs translate into a usable pay band.
| Role | Market Midpoint | Total Adjustment | Spread | Band Minimum | Band Maximum | Current Pay | Compa Ratio |
|---|---|---|---|---|---|---|---|
| HR Generalist | $62,000 | 4% | 35% | $53,000 | $75,000 | $59,500 | 92.30% |
| HR Business Partner | $78,000 | 11% | 40% | $69,500 | $104,500 | $72,000 | 83.92% |
| People Analytics Manager | $110,000 | 8% | 45% | $92,000 | $145,000 | $118,000 | 99.33% |
Formula used
1. Annualized pay
Annualized Pay = Current Pay × Frequency Factor
Hourly Pay = Hourly Rate × Hours per Week × Weeks per Year
2. Total adjustment
Total Adjustment % = Geo Differential + Experience Premium + Performance Premium + Internal Equity Adjustment
3. Adjusted midpoint
Adjusted Midpoint = Market Midpoint × (1 + Total Adjustment % ÷ 100)
4. Salary band limits
Minimum = Adjusted Midpoint × (1 − Spread % ÷ 200)
Maximum = Adjusted Midpoint × (1 + Spread % ÷ 200)
5. Compa ratio
Compa Ratio % = Annualized Pay ÷ Adjusted Midpoint × 100
6. Range penetration
Range Penetration % = (Annualized Pay − Minimum) ÷ (Maximum − Minimum) × 100
7. Target salary
Target Salary = Minimum + ((Target Percentile ÷ 100) × (Maximum − Minimum))
How to use this calculator
- Enter the employee, role, and department for a clear output summary.
- Select the current pay frequency, then enter the employee’s pay amount.
- For hourly roles, add weekly hours and working weeks.
- Enter the external market midpoint for the role.
- Set your preferred band spread percentage.
- Add any location, experience, performance, and equity adjustments.
- Define the target percentile and policy guardrails.
- Choose the rounding increment used by your compensation team.
- Submit the form to view the calculated band above the form.
- Use the CSV and PDF buttons to export the result summary.
FAQs
1. What is a salary band?
A salary band is a pay range with a minimum, midpoint, and maximum. It helps HR teams structure offers, merit increases, promotions, and equity reviews consistently.
2. Why does midpoint matter?
Midpoint usually represents the market reference for fully effective performance. It gives compensation teams a neutral anchor for comparing current pay, target pay, and policy rules.
3. What does band spread mean?
Band spread is the percentage width of the range around midpoint. Wider spreads create more pay movement within a grade, while tighter spreads create narrower control.
4. What is compa ratio?
Compa ratio compares an employee’s pay to the midpoint. A 100% compa ratio means pay equals midpoint, while lower or higher values show relative positioning.
5. What is range penetration?
Range penetration shows how far someone’s pay has progressed through the band. It is useful for career stage reviews, promotion readiness, and pay progression planning.
6. Should I use market midpoint or internal midpoint?
Use market midpoint when aligning external competitiveness. Use an internal midpoint when your organization already has approved grade structures and pay architecture.
7. Why add geographic or equity adjustments?
These adjustments help reflect local labor markets, scarce skills, performance distinctions, or internal fairness concerns before finalizing the working midpoint and band limits.
8. Can this calculator replace compensation strategy?
No. It supports analysis, but final decisions should still consider budget, role scope, legal compliance, performance history, and broader talent strategy.