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Salary Intelligence calculates compa-ratios to show how an employee's salary compares with the market and your organisation's internal pay policy.
Overview
For each internal employee salary displayed on the analysis graph, Salary Intelligence calculates two compa-ratios: one against the market and one against the internal pay policy, when an internal pay policy exists for the role.
Both compa-ratios display as whole-number percentages without decimal points.
The formula for both calculations is:
Compa-ratio = (Employee salary ÷ Midpoint) × 100
The midpoint used in the calculation determines whether the result is a market compa-ratio or an internal benchmark compa-ratio.
Market compa-ratio
The market compa-ratio shows where an employee's salary sits relative to the market average for their role.
Midpoint used: The average market salary for the role, as determined by the AI prediction engine from comparable salary offer data.
ℹ️
The AI prediction engine produces a salary range rather than a single midpoint. Salary Intelligence uses the average market salary in its place.
Formula: Market compa-ratio = (Employee salary ÷ Market average salary) × 100
Example:
Employee salary: $90,000
Market average salary: $95,000
Market compa-ratio:
($90,000 ÷ $95,000) × 100 = 95%
Interpretation: The employee is paid at 95% of the market average and is slightly below the market midpoint for the role.
Internal benchmark compa-ratio
The internal benchmark compa-ratio shows where an employee's salary sits relative to your organisation's internal pay policy for the role.
This compa-ratio displays when a user sets an internal pay policy with From and To values for the role in the analysis.
Midpoint used: The arithmetic average of the From and To values entered in the internal pay policy.
Midpoint calculation: Internal midpoint = (From + To) ÷ 2
Formula: Internal compa-ratio = (Employee salary ÷ Internal midpoint) × 100
Example:
Internal pay policy: From $85,000 to $105,000
Internal midpoint:
($85,000 + $105,000) ÷ 2 = $95,000Employee salary: $90,000
Internal compa-ratio:
($90,000 ÷ $95,000) × 100 = 95%
Interpretation: The employee is paid at 95% of the organisation's internal pay band midpoint and sits slightly below the centre of the band.
Summary
Compa-ratio | Midpoint used | When displayed |
Market compa-ratio | Average market salary produced by the AI prediction engine | For every employee salary shown on the graph |
Internal benchmark compa-ratio | Arithmetic average of the internal pay policy's From and To values | When an internal pay policy exists for the role |