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Compa Ratio Calculator

📅Last updated: December 8, 2025
✓Reviewed by: LumoCalculator Team

Calculate compa ratio to measure how employee salaries compare to market midpoints. Essential for compensation analysis, pay equity reviews, and salary planning.

Compa Ratio Calculator

Analyze salary competitiveness

The competitive market rate or pay grade midpoint

Compa Ratio Analysis

Compa Ratio
93.8%
Below Midpoint
2nd Quartile (87.5% - 100%)
Actual Salary
$75,000
Midpoint
$80,000
Below Midpoint
$5,000 (-6.3%)
Range Position37.5%
$60k$80k$100k
💡 Recommendation

Slightly below midpoint. Appropriate for employees still developing in their role or newer to the position. Plan progression toward midpoint.

📋 Summary

With a salary of $75,000 against a midpoint of $80,000, the compa ratio is 93.8%. This is 6.3% below the competitive midpoint.

Compa Ratio Formula

Compa Ratio = Salary / Midpoint × 100
= 75,000 / 80,000 × 100
= 93.8%

Key Metrics

Compa Ratio93.8%
Quartile PositionQ2
Range Spread66.7%
Range Penetration37.5%

Related Calculators

Compa Ratio Benchmarks

Compa RatioDescriptionRecommended Action
< 80%Significantly underpaidImmediate review needed
80-90%Below marketPlan adjustment
90-95%Developing in roleNormal for new employees
95-105%At marketCompetitive pay
105-115%Above marketHigh performer premium
115-125%Top of rangeExceptional talent
> 125%Above rangeReview for equity

Key Compensation Concepts

📊 Compa Ratio
Salary / Midpoint × 100

Measures how an individual's pay compares to the competitive market rate.

🎯 Range Midpoint
(Min + Max) / 2

The market rate - what competitors typically pay for similar roles.

📏 Range Position
(Salary - Min) / (Max - Min)

Where salary falls within the full range (0% = min, 100% = max).

📈 Range Spread
(Max - Min) / Min × 100

Width of the pay range, indicating growth potential within grade.

Typical Range Spreads by Job Level

Job LevelTypical SpreadExample Range
Entry Level30-40%$40,000 - $52,000
Professional40-50%$60,000 - $84,000
Management50-60%$80,000 - $120,000
Director50-70%$120,000 - $192,000
Executive60-100%$200,000 - $360,000

How to Use Compa Ratio

🔍 Pay Equity Analysis

Compare compa ratios across demographic groups to identify potential pay gaps.

📋 Compensation Reviews

Use during annual reviews to determine appropriate salary adjustments.

💼 Hiring Decisions

Set offer salaries based on candidate experience relative to market.

📊 Budget Planning

Forecast merit increase budgets based on current compa ratio distribution.

Best Practices

✓ Use current market data

Update midpoints annually using fresh salary surveys to maintain competitive positioning.

✓ Consider the whole picture

Compa ratio should be viewed alongside performance, tenure, and total rewards.

✓ Set clear policies

Define target compa ratios for new hires, different performance levels, and promotion guidelines.

✗ Avoid over-reliance

Don't use compa ratio as the only metric - it doesn't account for skills, potential, or total compensation.

Frequently Asked Questions

What is a compa ratio?
Compa ratio (comparative ratio) measures how an employee's salary compares to the midpoint of their pay range or market rate. It's calculated as: (Actual Salary / Range Midpoint) × 100. A compa ratio of 100% means the employee is paid exactly at the market midpoint.
What is a good compa ratio?
A compa ratio between 95% and 105% is typically considered "at market." Below 90% may indicate underpayment, while above 110% might warrant review. The ideal ratio depends on performance, tenure, and organizational compensation philosophy.
How is range midpoint determined?
Range midpoint is typically set at the market rate for a position - what competitors pay for similar roles. It's often derived from salary surveys and represents the competitive pay rate for someone fully meeting job expectations.
What is the difference between compa ratio and range position?
Compa ratio compares salary to the midpoint only. Range position (or range penetration) shows where salary falls within the entire min-max range. An employee at 50% range position is at midpoint; at 100% range position, they're at maximum.
How do I use compa ratio for pay equity analysis?
Compare compa ratios across demographic groups (gender, ethnicity) for similar roles. Significant differences may indicate pay inequity. For example, if women's average compa ratio is 92% while men's is 103% for the same job, there may be a pay gap to address.
What is range spread?
Range spread is the percentage difference between the maximum and minimum of a pay range, calculated as: (Max - Min) / Min × 100. Broader spreads (50-60%) are common for senior roles with more growth potential, while narrower spreads (30-40%) suit entry-level positions.