Pay Structure
Compa-ratio
Also called: comp ratio, compa, compensation ratio
An employee's pay divided by the midpoint of their pay range, expressed as a decimal or percentage.
Compa-ratio measures how an employee's salary compares to the midpoint of their assigned pay range. It's calculated as base salary ÷ range midpoint and is expressed either as a decimal (1.05) or a percentage (105%).
A compa-ratio of 1.00 means the employee is paid exactly at the market midpoint. Above 1.00 means they're paid above midpoint; below 1.00 means they're paid below. Most organizations aim for a department or company-wide average compa-ratio between 0.95 and 1.05, depending on their pay positioning strategy.
Compa-ratio is the most commonly cited compensation metric because it lets you compare pay across roles, departments, and grades on a normalized scale. It's how comp teams quickly spot pay-equity issues, identify red-circled employees (paid above max), and assess whether ranges are functioning as designed.
Example
An accountant earns $72,000. Their pay grade has a midpoint of $75,000. Their compa-ratio is 72,000 ÷ 75,000 = 0.96 (or 96%).