Compa-Ratio Calculator
Compare an employee’s pay to the midpoint of their salary band with a compa-ratio, and see the raise needed to reach the midpoint.
How it works
Compa-ratio = salary ÷ band midpoint · Raise to midpoint% = (midpoint − salary) ÷ salary × 100
The compa-ratio is the core equity metric in compensation: an employee’s pay divided by the midpoint of their band. A ratio of 1.0 means they are paid exactly at market for a fully proficient performer; below 0.9 usually signals a developing employee or a pay gap, and above 1.1 marks a premium. Averaging compa-ratios across a team or the whole company shows whether you are paying above or below your own pay structure.
Worked example
An employee earning $72,000 against an $80,000 midpoint has a compa-ratio of 72,000 ÷ 80,000 = 0.90, or 90% of midpoint. They are $8,000 below midpoint; an 11.1% raise would bring them exactly to $80,000.
Frequently asked questions
What is a good compa-ratio?
For a fully proficient employee, close to 1.0 (at midpoint) is the target. New or developing staff often sit between 0.80 and 0.95, while long-tenured top performers may exceed 1.10. Context matters more than the raw number.
What does a group compa-ratio tell me?
Averaging compa-ratios across a team reveals whether you are paying above or below your own structure. A group average well below 1.0 can point to lagging pay and retention risk; well above 1.0 can strain the budget.
Why is the raise-to-midpoint percentage larger than the gap looks?
The raise is measured against the current (lower) salary, not the midpoint. Being 10% below midpoint requires an 11.1% raise because you are growing from the smaller base up to the larger one.
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Educational planning estimate, not accounting, tax or HR advice.