Salary Benchmarking & Offer Range Calculator

How this salary benchmarking calculator works

The calculator uses a simple, transparent sequence of steps:

1. Start from a market midpoint. This is the typical or “going rate” base salary for a given role, level, and location. You might take this from salary surveys, compensation databases, or aggregated job site data.
2. Adjust for location. Many companies pay different amounts for the same role in different markets. A location factor scales the benchmark up or down relative to the original market.
3. Adjust for experience or role level within band. A candidate who is stronger than the midpoint or who operates at the upper end of a level might justify a higher figure; a less experienced or narrower‑scope role might land below midpoint.
4. Apply a band width. Instead of a single number, you set a percentage band around the adjusted midpoint to define low, mid, and high points for offers.
5. Add bonus and equity. For roles with variable pay, you can add a target bonus percentage and an annualized equity estimate to see total compensation, not just base salary.

Formulas used in the calculator

The core logic is based on straightforward percentage calculations. Let:

• M = market midpoint salary (annual base)
• L = location factor (percent of benchmark)
• E = experience factor (percent of adjusted midpoint)
• B = band width (percent above and below midpoint)
• r = target bonus percentage
• Q = estimated equity value per year

First, the location‑adjusted midpoint is:

Then, the experience‑adjusted midpoint is:

The low and high ends of the base salary band are:

The target bonus at each point is the base salary times r / 100. Total compensation is:

Total comp = base salary + (base salary × r / 100) + Q

How to interpret your salary range

The calculator gives you three anchor points: low, midpoint, and high. These can be interpreted differently depending on whether you are a job seeker or a hiring manager.

• Low end: A reasonable minimum for candidates who are lighter on experience, earlier in the level, or where there is high internal pay compression pressure.
• Midpoint: A fair “typical” offer for someone who meets expectations for the role and level in the given location.
• High end: Reserved for strong fits with above‑average experience, scarce skills, or for closing competitive candidates, assuming internal equity allows it.

Job seekers can use these ranges to decide whether an offer seems low, fair, or aggressive, and to frame counter‑offers with data. Hiring managers can use them to align with compensation partners and to maintain consistency across candidates.

Worked example

Imagine you are evaluating a Senior Software Engineer role with the following assumptions:

• Market midpoint (M): $160,000
• Location factor (L): 120% (high‑cost city vs national benchmark)
• Experience factor (E): 105% (slightly above midpoint candidate)
• Band width (B): 15%
• Target bonus (r): 10%
• Estimated equity per year (Q): $40,000

The calculator would:

1. Adjust for location: $160,000 × 120% = $192,000.
2. Adjust for experience: $192,000 × 105% = $201,600 adjusted midpoint.
3. Apply band width (15%):
   • Low base ≈ $201,600 × (1 − 0.15) = $171,360
   • High base ≈ $201,600 × (1 + 0.15) = $231,840
4. Compute target bonus (10%) and add equity for total comp at each point.

You can then compare these figures to an actual offer. If you receive $180,000 base with no equity, but your modeled midpoint total compensation is much higher, that may signal room to negotiate or a need to revisit your assumptions.

Comparison: different scenarios at a glance

The table below compares how location and experience changes affect the adjusted midpoint base salary, assuming the same starting benchmark of $120,000 and a 20% band width. Bonus and equity are omitted for simplicity.

You can recreate these kinds of scenarios with your own inputs to explore the impact of different policies or negotiation positions.

Using this tool as a job seeker vs. hiring manager

Job seekers

• Benchmark offers before applying, so you know what range to target.
• Test multiple location and experience factors if you are open to relocation or remote work.
• Use total compensation outputs (base + bonus + equity) to compare offers across companies.

Hiring managers and compensation teams

• Translate survey midpoints into a clear band for posting or internal approvals.
• Model how location or level policy changes affect budgets and equity usage.
• Maintain internal equity by using consistent factors across similar roles.

Limitations and assumptions

This calculator provides structured estimates, not guarantees. It relies entirely on the quality and relevance of the inputs you provide.

• Data quality: Market midpoints can vary significantly by source, company size, and industry. Use multiple, recent data sources where possible.
• Company‑specific practices: Real‑world pay decisions depend on internal pay bands, budget constraints, performance, and equity refresh policies that this tool does not model.
• Location and experience factors: The percentage ranges are simplifications. Some organizations use discrete zones or levels rather than smooth percentages.
• Equity valuation: Equity outcomes are uncertain and can change with company performance, dilution, and vesting schedules. The annual equity value here is a rough estimate only.
• Not legal, tax, or financial advice: The outputs are for informational and planning purposes only. Always consult qualified professionals or your compensation team before making binding decisions.

Treat the results as a starting point for conversations, not as definitive market truth. When in doubt, combine this tool with additional research and professional guidance.

Why Salary Benchmarking Is So Confusing

Salary decisions are messy. Job seekers see wildly different numbers on Glassdoor, Levels, or recruiter emails. Hiring managers must balance budgets, internal equity, and market pressure. Two people with the same title can earn very different pay depending on location, seniority, and company size. Even well‑intentioned employers can drift into underpaying or overpaying because “market rate” is a moving target.

A good benchmark process separates three ideas: (1) what the market pays for a role in a reference location, (2) how your local cost of labor differs from that reference, and (3) how experience and performance shift pay within the band. This calculator is designed around those ideas. You provide a market benchmark (median or midpoint), then adjust it with simple multipliers to produce an offer range.

Step 1: Start With a Market Midpoint

Most benchmark sources publish a midpoint (often a median) for a role. That midpoint is typically tied to a reference market such as “U.S. national,” “London,” or “San Francisco Bay Area.” The midpoint is not a promise of what everyone earns; it is the center of a range. The job market is a distribution, not a single number.

Let M be the benchmark midpoint annual base salary for the role.

Step 2: Apply a Location (Cost‑of‑Labor) Factor

Companies often pay different salaries in different cities because the local cost of labor differs. Some companies use cost‑of‑living (COL) indexes, others use cost‑of‑labor surveys. Either way, the adjustment is usually a percentage. If your location factor is L (e.g., 0.90 for a lower‑cost area or 1.20 for a higher‑cost area), then the location‑adjusted midpoint is:

Some remote roles are paid at a national rate (L=1.0). Others use a tier system. The key is to be explicit.

Step 3: Place the Candidate in the Band

Salary bands commonly extend ±15–25% around the midpoint. Junior candidates sit below midpoint; senior candidates above. We model an “experience factor” E that scales the midpoint. For example, E=0.85 for entry‑level, E=1.0 for fully qualified, E=1.15 for senior. The target base salary becomes:

To create a range, we expand around that target using a band width W (say 20%).

Step 4: Consider Total Compensation

Base salary is only one part of pay. Bonus, commission, and equity can change the effective value of an offer. This calculator lets you enter an annual target bonus percent and a rough annualized value for equity. Total compensation is:

Worked Example

Suppose you’re hiring a data analyst. The market benchmark midpoint in a national survey is $85,000. Your company uses a location tier where your city is 95% of national (L=0.95). The candidate is slightly above fully qualified for the role (E=1.05). You use a 20% band width. The role also has a 10% target bonus and you estimate equity is worth about $6,000 per year.

Adjusted midpoint: $85,000 × 0.95 = $80,750.

Target base salary: $85,000 × 0.95 × 1.05 ≈ $84,788.

Range low: $84,788 × 0.80 ≈ $67,830. Range high: $84,788 × 1.20 ≈ $101,746.

At the target base, bonus is 10% × $84,788 ≈ $8,479. Total comp estimate: $84,788 + $8,479 + $6,000 ≈ $99,267.

That gives a clear offer anchor and a defensible band for negotiation.

Comparison Table: Interpreting the Range

Midpoint vs Percentiles (Why Two Sources Disagree)

Salary data sources often report different numbers because they are describing different points in the distribution. A “median” is the 50th percentile. A “midpoint” in a company’s salary band might be aligned to the market median, but not always—some companies peg midpoints to the 60th or 75th percentile to hire aggressively. If you are comparing sources, try to translate them into percentiles. A role might have a $90k median but a $105k 75th percentile. If you are a top performer or have scarce skills, negotiating near the upper percentiles can be realistic.

Internal Equity and Pay Transparency

Even if the market would pay more, companies often constrain offers to protect internal equity—people in the same level and function should be paid within a comparable range. Many jurisdictions also enforce pay transparency rules requiring posted ranges. If you are hiring, this is a feature, not a bug: consistent bands reduce bias and legal risk. If you are negotiating, it means that your best leverage is often level calibration (e.g., “is this L4 or L5?”) rather than squeezing above the band.

This calculator helps you explore those calibration conversations by making the “experience factor” explicit. If your range feels low, try increasing experience factor (level up) rather than only increasing location factor.

Bonus, Equity, and the Cost of Risk

Two offers with the same expected total compensation can feel very different because of risk and liquidity. Cash salary is certain. Bonus depends on company and personal performance. Equity value is uncertain and often illiquid, especially at private companies. That is why this calculator asks for an annualized equity estimate rather than trying to compute a “true” value. A simple planning approach is to discount equity for risk (for example, treat it as worth 50–70% of the headline value) and then see whether the base salary still meets your needs.

Negotiation Uses (Job Seeker and Hiring Manager)

If you are a job seeker, the range provides a structure for negotiation:

• Ask which location tier you are in and whether the role is pegged to national or local bands.
• Ask what level the company is mapping you to and what that level’s band is.
• Use the range to propose a target number and a fallback (for example, “I’m aiming for $X; if base is constrained, can we increase bonus or equity?”).

If you are a hiring manager, the same structure helps you make consistent offers and explain them clearly. A transparent process reduces negotiation friction and helps close candidates faster.

Limitations and Assumptions

Benchmarking is inherently approximate. This calculator assumes:

• Your midpoint benchmark is credible and current.
• Location factor reflects cost of labor for the role, not only cost of living.
• Experience factor is a fair summary of seniority and impact.
• Equity annualization is a rough planning proxy, not a guaranteed value.

Real compensation planning should also check internal equity and pay transparency constraints. Still, the math here provides a clear structure for fair offers and confident negotiations.