ModuleHireHR
COMPENSATION · GUIDE + TEMPLATE

Salary bands, built to last.

A clear, defensible way to set pay by level and location, based on market data you research yourself.

Inside:The language of pay bands · a 4-step build process · how to research market pay · placing employees in bands · pay equity and transparency notes for CA, NY, IL, TX, and FL · an Excel band calculator
2026 EDITIONHR.MODULEHIRE.COM
Preview
The language

Eight terms to know.

The calculator uses all of these. Agree on what they mean before you build anything.

  • Level
    A step in the career ladder, defined by scope and impact, not title. For example, IC1 to IC5 for individual contributors, M1 to M3 for managers.
  • Market rate
    What the market pays for a role at a level and location, from the sources you research.
  • Midpoint
    The center of the band. Usually the market rate, adjusted for location.
  • Range spread
    How wide the band is: maximum minus minimum, divided by minimum. Wider for senior levels.
  • Minimum and maximum
    The lowest and highest pay for the band. New or developing people sit lower, proven experts sit higher.
  • Pay differential
    A location adjustment, such as 1.10 for a higher-cost city compared to your base market.
  • Compa-ratio
    Salary divided by midpoint. 1.00 means paid exactly at midpoint.
  • Range position
    How far through the band a salary sits, from 0% at the minimum to 100% at the maximum.
ModuleHire HR · Salary bands and leveling03
Preview
04
The build

Four steps to your first bands.

Plan for a few weeks the first time. After that, an annual refresh takes a few days.

1
Week 1

Level your roles

Define 5 to 8 levels by scope and impact. Place each role and person at a level based on the work they actually do.

2
Weeks 2 to 3

Research the market

For each role, level, and location, research current pay from at least two sources. Record the source and date.

3
Week 3

Build the bands

Set midpoints from your market data, apply location differentials and range spreads, and round to clean numbers.

4
Week 4

Place people and fix gaps

Compare every employee to their band. Plan how to address anyone below minimum, and review with counsel.

+

Refresh every year

Markets move. Re-research market rates at least once a year, before your merit and promotion cycle, and update the bands before you make offers or raises.

AnnuallyBefore merit cycleBefore posting ranges
ModuleHire HR · Salary bands and leveling04
Preview
Full guide

7 more pages in the full guide

Plus the editable Excel template.