Compa-ratio calculator
Enter an employee's pay and the pay range for their job to get the compa-ratio, range penetration and range midpoint. Add a market median to see the market index too, and a plain-language read of where the pay sits. Works with hourly rates or annual salaries.
- Range midpoint
- $42.00/hr
- Pay vs midpoint
- +$2.00/hr
- Range penetration (min = 0%, max = 100%)
- 64.3%
- Range spread ((max − min) ÷ min)
- 40.0%
- Market index (pay ÷ market p50)
- 0.98
- Midpoint ÷ market p50
- 0.93
Pay is 4.8% ($2.00/hr) above the range midpoint. That is 64% of the way from the range minimum to the maximum. Against the market, pay is close to the market median (market index 0.98). The midpoint itself is 6.7% below the market median, so the range may be out of date.
Around the rate the structure sets for a fully proficient, experienced performer. These bands are common rules of thumb, not a standard.
The defaults describe an example registered nurse at $44.00/hr in a $35.00 to $49.00 range with a $45.00 market median. They are illustrative, not market data. A compa-ratio is only as good as the range behind it; for current market pay by role and state, see salary data.
How the calculator works
Compa-ratio (short for comparative ratio) compares one employee's base pay with the midpoint of the pay range for their job. The midpoint is usually set at or near the market rate the organization has decided to pay for a fully proficient employee, so a compa-ratio of 1.00 means “paid exactly where our structure says this job is worth”.
- Enter base pay, hourly or annual. Leave out shift differentials, overtime and bonuses; ranges are built for base pay.
- Enter the range as a minimum and maximum (the calculator works out the midpoint), or enter the midpoint directly if that is all you have.
- Optionally add the market median (p50) for the same role and location. That adds the market index and shows whether the range itself is in line with the market.
Switching between hourly and annual converts every figure at 2,080 hours a year (40 hours × 52 weeks). The ratios don't change, because pay and range are scaled by the same number.
Compa-ratio formula (and the two metrics next to it)
- Compa-ratio
- Where pay sits against the midpoint of your own structure. 1.00 is the midpoint.
- Range penetration
- How far pay has moved through the range: 0% at the minimum, 50% at the midpoint, 100% at the maximum. It can go below 0% or above 100% when pay is outside the range.
- Market index
- Where pay sits against the outside market median, independent of your range.
Worked example: a staff nurse
Illustrative: a staff RN is paid $44.00/hr. The range for the job is $35.00 to $49.00/hr, and the market median for the role and metro is $45.00/hr.
Pay is 4.8% ($2.00/hr) above the range midpoint. That is 64% of the way from the range minimum to the maximum. Against the market, pay is close to the market median (market index 0.98). The midpoint itself is 6.7% below the market median, so the range may be out of date.
The same nurse on an annual basis: $91,520 against a $72,800 to $101,920 range with a $87,360 midpoint. The compa-ratio is still 1.05.
Five nurses in the same illustrative range:
| Hourly pay | Compa-ratio | Range penetration | Reading |
|---|---|---|---|
| $33.00 | 0.79 | -14.3% | Well below midpoint (below range minimum) |
| $38.00 | 0.90 | 21.4% | Below midpoint |
| $42.00 | 1.00 | 50.0% | At midpoint |
| $46.00 | 1.10 | 78.6% | Above midpoint |
| $51.00 | 1.21 | 114.3% | Well above midpoint (above range maximum) |
Reading the result
These bands are common rules of thumb rather than a standard. Your compensation philosophy may draw the lines differently.
| Compa-ratio | Position | Typical reading |
|---|---|---|
| Below 0.80 | Well below midpoint | Often below the range minimum. Check for a missed adjustment or a job slotted in the wrong grade. |
| 0.80 to 0.95 | Below midpoint | Typical for someone new to the role or still building skills. Expect faster progression. |
| 0.95 to 1.05 | At midpoint | Around the rate the structure sets for a fully proficient, experienced performer. |
| 1.05 to 1.20 | Above midpoint | Usually backed by long tenure, advanced credentials or sustained high performance. |
| Above 1.20 | Well above midpoint | Often above the range maximum. Increases are commonly paid as lump sums instead of base pay. |
Read a compa-ratio alongside tenure and performance. A 0.88 for a nurse six months into the role is expected; the same 0.88 for a charge nurse with ten years on the unit is a retention risk. Range penetration adds the width of the range: a compa-ratio of 1.10 is 75.0% of the way through a $36.00 to $54.00 range, but already at the maximum (100.0%) of a $40.50 to $49.50 range.
Compa-ratio is also the usual input to a merit matrix, where people lower in the range get a larger percentage increase for the same performance. Try it with the merit increase calculator, and read the full compa-ratio guide for group compa-ratios, merit matrices and healthcare step structures.
Frequently asked questions
How do you calculate compa-ratio?
Divide the employee's base pay by the midpoint of the pay range for their job. If the range only lists a minimum and maximum, the midpoint is their average. A nurse paid $44.00/hr in a $35.00 to $49.00 range has a midpoint of $42.00 and a compa-ratio of $44.00 ÷ $42.00 = 1.05.
What is a good compa-ratio?
There is no single good number. Around 1.00 (0.95 to 1.05 is a common rule of thumb) means pay is where the structure says a fully proficient employee should be. Lower ratios are normal for people new to a role and higher ratios for long-tenured or highly credentialed staff. A low ratio for an experienced performer, or a high one for a new hire, is the signal to look at.
What is range penetration?
Range penetration shows how far pay has moved through the range, from 0% at the minimum to 100% at the maximum: (pay − minimum) ÷ (maximum − minimum). Unlike compa-ratio it accounts for how wide the range is. A compa-ratio of 1.10 is 75.0% penetration in a $36.00 to $54.00 range but 100.0% in a $40.50 to $49.50 range.
What is the difference between compa-ratio and market index?
Compa-ratio compares pay with your own pay range midpoint. Market index compares pay with the external market median (p50) for the same job and location. If the range is current the two are close; if they disagree, the range itself is probably out of date.
Can I use annual salary instead of hourly pay?
Yes, as long as every figure uses the same basis. Converting pay and the range from hourly to annual at 2,080 hours a year multiplies both sides by the same number, so the compa-ratio does not change. For part-time employees, use their hourly rate or a full-time equivalent salary, not their actual annual earnings.