Salary Benchmarking & Offer Range Calculator

Turn a market benchmark into a personalized salary range. Adjust for location, experience, and total compensation so you can negotiate or hire with confidence.

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.