Calculator
Example Data Table
| Role | Employee Pay (Annual) | Midpoint (Annual) | Compa Ratio | Interpretation |
|---|---|---|---|---|
| HR Generalist | 68,000 | 72,000 | 0.9444 | Below midpoint |
| People Ops Specialist | 78,500 | 78,000 | 1.0064 | Near midpoint |
| Compensation Analyst | 103,000 | 95,000 | 1.0842 | Above midpoint |
| HR Business Partner | 124,000 | 110,000 | 1.1273 | Above midpoint |
Formula Used
- Base Compa Ratio = Annualized Salary ÷ Annualized Midpoint
- Total Compa Ratio = (Annualized Salary + Included Extras) ÷ Annualized Midpoint
- Difference to Midpoint = Annualized Salary − Annualized Midpoint
- Range Penetration = (Annualized Salary − Annualized Range Min) ÷ (Annualized Range Max − Annualized Range Min)
How to Use This Calculator
- Enter the employee pay amount and the matching midpoint reference.
- Select the pay frequency used for both values.
- Optionally add bonus and allowance, then enable extras if needed.
- Provide range minimum and maximum to evaluate positioning.
- Set a target ratio to estimate the needed adjustment.
- Click Calculate to view results above and download exports.
What Compa-Ratio Measures
Compa-ratio compares an employee’s annualized pay to the role’s annualized midpoint. A value of 1.00 means pay is exactly at midpoint; 0.90 indicates pay is 10% below midpoint, and 1.10 is 10% above. Because this tool annualizes hourly, weekly, and monthly amounts, you can benchmark mixed pay types consistently. Always confirm the midpoint comes from the correct grade, geography, and job family.
Interpreting Targets and Bands
Many organizations set guidelines such as 0.80–0.90 for developing talent, 0.90–1.10 for fully proficient employees, and 1.10+ for advanced expertise or scarce skills. Use bands as decision aids, not automatic triggers. Performance, tenure in role, internal equity, and market movement all matter. A compa-ratio slightly below target may be acceptable if the employee is new to level.
Using Range Penetration and Positioning
Compa-ratio alone can hide range context, so review range penetration too. Two employees can share a 0.95 compa-ratio but sit in very different ranges if their midpoints differ. Range penetration shows how far pay has progressed from minimum to maximum. When penetration is high and compa-ratio is high, progression may be nearing the top, suggesting bonuses, skill-based pay, or promotion paths instead of repeated base increases.
Detecting Compression and Equity Risks
Look for patterns: clusters of low compa-ratios in one team can signal outdated ranges or under-hiring budgets; clusters of high compa-ratios can indicate compression, title inflation, or retention premiums. Compare peer groups by level, location, and critical skills, then spot gaps versus midpoint and range minimum. Use the difference-to-midpoint output to estimate adjustment dollars and to prioritize cases with the largest shortfalls.
Turning Results into Actionable Pay Moves
Translate findings into a plan: decide a target compa-ratio (for example 0.95 this cycle, 1.00 next cycle), estimate cost using annualized differences, and phase changes to fit budgets. Document exceptions, such as hard-to-fill roles, and avoid raising one person without checking peers. Re-run the tool after proposed increases to validate final positioning and confirm the range min/max are not breached.
FAQs
1. What is a compa-ratio?
It is the employee’s annualized salary divided by the annualized midpoint for the job’s pay range. Values below 1.00 are under midpoint; values above 1.00 are over midpoint.
2. What midpoint should I use?
Use the midpoint for the correct grade, location, and job family that matches the employee’s current role. If you have separate midpoints for different geographies, don’t mix them.
3. Why does annualization matter?
It converts hourly, weekly, or monthly pay into a comparable annual figure. That prevents misleading ratios when employees work different schedules or are paid in different frequencies.
4. What is a healthy compa-ratio range?
It depends on your pay philosophy, but many organizations manage most employees around 0.90–1.10. Interpret outliers alongside performance, tenure, and market pricing.
5. How should I use this for promotions?
After a level change, update the midpoint and range for the new grade, then re-run the tool. This helps you validate the new salary sits appropriately within the new range.
6. What do the CSV and PDF downloads include?
They export the inputs and calculated outputs like compa-ratio, difference to midpoint, and range penetration. Use them to document decisions and share summaries with stakeholders.