1. What is Compa Ratio?

The Compa Ratio (or Comparative Ratio) is a measure that compares an individual's salary to the midpoint of a salary range for their position. It's expressed as a percentage and helps determine how an employee's pay compares to the market rate.

2. How Does the Calculator Work?

The calculator uses the Compa Ratio formula:

Where:

• My Salary — Your current annual salary
• Midpoint of Pay Range — The middle point of the salary range for your position

Explanation: A ratio of 100% means you're paid exactly at the market midpoint. Below 100% indicates you're paid below market, while above 100% means you're paid above market.

3. Importance of Compa Ratio

Details: Compa Ratio is crucial for both employees and employers. It helps in salary benchmarking, pay equity analysis, and compensation planning. Employers use it to ensure fair pay, while employees can use it to understand their market position.

4. Using the Calculator

Tips: Enter your current annual salary and the midpoint of the pay range for your position. Both values should be in the same currency (typically annual amounts). The midpoint is usually provided by HR or can be found in compensation surveys.

5. Frequently Asked Questions (FAQ)

Q1: What is a good compa ratio?
A: Typically 80-120% is considered normal. 100% means you're paid exactly at market midpoint. Below 80% may indicate underpayment, while above 120% may indicate overpayment or highly specialized skills.

Q2: How often should compa ratio be calculated?
A: Annually, or whenever there's a significant change in salary or market data. Many companies review compa ratios during annual compensation reviews.

Q3: Where can I find the midpoint for my position?
A: HR departments usually have this information. Alternatively, you can find salary range data from industry surveys, government reports, or professional associations.

Q4: Does compa ratio vary by location?
A: Yes, salary ranges and midpoints often vary by geographic location due to cost of living differences. Make sure you're comparing to data for your specific location.

Q5: How is compa ratio different from range penetration?
A: Range penetration shows where your salary falls within the entire range (from minimum to maximum), while compa ratio specifically compares to the midpoint.