Salary & compensation · Updated September 2026
Compa-ratio answers one specific question: is this person paid at, above, or below the middle of what the role is supposed to pay? It’s a single number that turns a vague sense of “seems underpaid” into something you can actually act on.
Compa-ratio = (Actual salary ÷ Midpoint of the pay range) × 100
An employee earning ₹9,00,000 in a pay band with a midpoint of ₹10,00,000 has a compa-ratio of 90%. The commonly used interpretation bands:
| Compa-ratio | What it typically means |
|---|---|
| Below 80% | Meaningfully underpaid relative to the range |
| 80-90% | New hires or recently promoted employees |
| 90-100% | Experienced, market-competitive pay |
| 100-110% | Strong, established performers |
| 110-120% | Specialised or hard-to-replace skills |
| Above 120% | Overpaid relative to the range, worth a second look |
These bands are general HR practice rather than an India-specific standard, but they’re used the same way here as anywhere else.
Not necessarily. New hires and recently promoted employees are expected to sit below 100% until their experience catches up to the role. A persistently low compa-ratio on a tenured employee is the more meaningful signal.
Compa-ratio measures against the midpoint specifically. Range penetration measures where pay falls across the full minimum-to-maximum span, a related but distinct calculation some companies also track.
Yes, averaging compa-ratios across a team or department is a common way to spot systemic pay equity issues, not just individual outliers.
Calculate a specific compa-ratio with the Compa-Ratio Calculator, and see the related Pay Equity Calculator for a broader fairness check.