Pay Structure Model
A pay structure model builds salary grades with defined minimum, midpoint and maximum values. Use the linear method for a single grade or the exponential method to model progression across many grades at once.
Choose Calculation Method
About Pay Structure
A pay structure determines and administers compensation based on responsibilities, skills, performance and market conditions.
Structures consist of salary grades with defined minimum, midpoint and maximum values. The progression between grades determines how pay increases up the hierarchy.
Understanding the parameters
- Midpoint: target salary for fully proficient employees in Grade 1
- Pay Range %: spread between min and max (e.g. 40% means ±20% from midpoint)
- Pay Progression %: percentage increase between consecutive grades
- Grade: the salary grade to calculate for
Enter Pay Structure Parameters
Indicative only. For pay decisions that matter, our consultants provide the full methodology and market data.
How to build a pay structure
- 1Set the starting midpoint and the number of grades you want in the structure.
- 2Choose a method: linear for even steps between grades, or exponential to widen progression as grades rise.
- 3Define the range spread and midpoint progression to generate each grade's minimum, midpoint and maximum.
Frequently Asked Questions
What is a pay structure?
A pay structure is a set of salary grades, each with a defined minimum, midpoint and maximum, that governs how much roles at each level are paid and how pay progresses between levels.
What is midpoint progression?
Midpoint progression is the percentage increase between the midpoints of adjacent grades. A consistent progression (often 10–25%) keeps the structure fair and competitive.
What is the difference between a linear and exponential pay structure?
A linear structure adds a fixed amount between grades; an exponential structure applies a fixed percentage, so the gaps widen at senior levels where market pay accelerates.