Salary Range Spread Formula

Salary Range

A salary range is the range of salary in one job grade. The pay range represents the amount that the firm is willing to pay.

Range Spread

The range spread is also known as range width or full range spread. It determines the breath of salary range.

Definition 1 – The distance between the bottom and top of the salary range.

Definition 2 – The percentage in which the maximum exceeds the minimum, relative to the minimum

Definition 3 – It is the difference between the maximum and the minimum pay level, in dollars, for a given pay range.

The range spread percentage is a percentage calculated by dividing the range spread for a given pay range by the minimum for that pay range.

Formula – It can be express as a percentage:

Range Spread (%) = Maximum less Minimum  X 100
Maximum

Formula – It can also be express as a ratio:

Range Spread  = Maximum less Minimum
Maximum

Example

Maximum = $90,000

Minimum = $60,000

It can be express as a percentage:

Range Spread (%) = ($90,000 – $60,000) / $60,000 X 100 = 50%

It can also be express as a ratio:

Range Spread = ($90,000 – $60,000) / $60,000 = 0.5

Example Using Excel

Salary Formula 23A

How to Calculate the Spread on Either Side of Midpoint

The following formulas are used to calculate the lower end spread and the upper end spread.

Salary Formula 23B

Source: The WorldatWork Handbook of Compensation,Benefits and Total Rewards

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