Calculate compa ratio from current pay and market midpoint, pay range, or target ratio, and find the raise needed to reach target pay.

Compare current pay with the chosen range or market reference.

Use comparable base pay in the same currency and pay period. Ratios describe pay position; they do not measure performance, fairness or retention risk.

Compa Ratio Formula

Compa Ratio = (Current Pay / Market Midpoint) × 100
  • Current Pay — the employee's base salary or hourly rate.
  • Market Midpoint — the middle of the salary range for the role, or the market rate from a salary survey.

If you only have the range minimum and maximum, calculate the midpoint first:

Midpoint = (Range Min + Range Max) / 2

To solve for the pay needed to hit a target compa ratio:

Target Pay = Midpoint × (Target Compa Ratio / 100)

Use the same pay basis on both sides of the formula. Compare annual salary to an annual midpoint, or hourly to hourly. A ratio of 1.00 (100%) means pay equals the midpoint exactly.

Reference Tables

The following illustrative bands describe numerical pay position only. Employers define their own ranges and policies; these bands do not establish performance or retention risk.

Compa Ratio Numerical interpretation
Below 80%Less than 0.80 times the selected midpoint; range limits are separate inputs.
80% – 95%0.80 to 0.95 times the selected midpoint.
95% – 105%Within 5% of the selected midpoint.
105% – 115%1.05 to 1.15 times the selected midpoint.
Above 115%More than 1.15 times the selected midpoint; the range maximum must be checked separately.

For an arithmetic midpoint and range spread defined as (maximum − minimum) / minimum, the endpoint compa ratios follow the examples below. These are mathematical illustrations, not universal salary-range standards.

Range Spread Min Compa Ratio Max Compa Ratio
30% from minimum86.96%113.04%
40% from minimum83.33%116.67%
50% from minimum80%120%

Example

An employee earns $65,000. The market midpoint for the role is $70,000.

Compa Ratio = (65,000 / 70,000) * 100 = 92.86%

The employee sits below midpoint. To reach a 100% compa ratio, pay would need to rise to $70,000, a $5,000 increase. To reach 95%, pay would need to rise to $66,500.

FAQ

Is a compa ratio above 100% bad? No. Above 100% means pay is above the chosen midpoint. It does not by itself establish performance, tenure, a pay limit or a compensation decision.

What if I do not know the midpoint? Choose the reference-midpoint option "From range minimum and maximum" and enter the range minimum and maximum. The calculator averages them to get the midpoint.

Group compa ratio vs. individual compa ratio? For employees sharing one midpoint and pay basis, compare average pay with that midpoint. For different midpoint amounts, use total pay divided by the sum of the matching midpoint amounts; an unweighted average of individual ratios answers a different question.

Can I use it for hourly pay? Yes. Just keep both numbers on the same basis, either hourly or annual.