A salary range is a simple way to keep pay decisions consistent, explainable, and fair. The midpoint is your anchor (often aligned to the market), while minimum and maximum create guardrails for hiring, progression, and pay reviews.

This guide uses familiar Australian HR/payroll language (e.g., superannuation, award, enterprise agreement, remuneration, base salary), but it won’t hammer “Australia” in every paragraph.

What Minimum–Midpoint–Maximum Means in Practice

• Minimum: where you’d typically hire someone who meets the requirements but is still building capability at the level (or is new to the role).
• Midpoint: the rate for a solid performer who is fully proficient at the level often your market benchmark.
• Maximum: the upper end for someone operating strongly and consistently at the level, before the role genuinely becomes “the next level up”.

Ranges aren’t a promise of automatic progression to maximum. They’re a structure for making decisions consistently.

Step 1: Start With the Right Job Match (Title Isn’t Enough)

If you benchmark the wrong job, your range will be wrong no spreadsheet can fix that.

Practical job match checklist

• Job family and discipline (e.g., Engineering → Backend; Finance → FP&A)
• Level and scope (complexity, autonomy, decision-making, stakeholder impact)
• People leadership vs individual contributor
• Required skills (e.g., performance marketing vs brand; cloud infra vs app dev)
• Work location approach (office-based, hybrid, fully remote; single-zone vs multi-zone)

Example: “Account Manager” can mean a relationship manager, a renewals specialist, or a quota-carrying sales role. Don’t price them from the same data.

Step 2: Set the Midpoint (Your Anchor)

Most organisations set the midpoint to reflect the market rate for someone fully competent in the role at that level.

A simple approach:

• Choose your target market position (commonly market median, or higher for scarce skills)
• Decide whether you’re anchoring to base salary or total remuneration package (TRP)

Australian pay terms (use consistently)

• Base salary: salary excluding super and bonuses
• Superannuation: employer contributions (typically expressed separately)
• TRP / package: commonly base + super (and sometimes other fixed allowances); definitions vary by organisation
• Total cash: base + bonus/commission (if applicable)

Practical tip: If your market data is “base”, build base ranges. If it’s “package/TRP”, convert or build ranges on the same basis don’t mix.

Step 3: Choose a Range Spread (How Wide the Range Is)

Your range spread depends on how much variation you want within a level.

A useful starting pattern is: wider ranges at more senior levels.

Typical spreads (as a starting point)

• Entry / early career: 30%
• Mid-level professional: 40%
• Senior / lead: 50%
• People leaders / executive: 50–70% (often broader due to scope variance)

Range spread examples (with real numbers)

Assume a midpoint of $100,000 base.

30% spread (±15%)

• Min: $100,000 × 0.85 = $85,000
• Mid: $100,000
• Max: $100,000 × 1.15 = $115,000

40% spread (±20%)

• Min: $80,000
• Mid: $100,000
• Max: $120,000

50% spread (±25%)

• Min: $75,000
• Mid: $100,000
• Max: $125,000

If you prefer a slightly tighter hiring entry point but more headroom, you can use an asymmetric approach like 85%–100%–125%.

Step 4: Market Data Sources (Pick a Few, Don’t Overfit)

You don’t need perfect data just a few credible signals you can explain.

Common sources:

• Compensation surveys (strong for consistent job matching)
• Recruiter insights (useful for fast-moving markets; sanity check across multiple recruiters)
• Job ads with ranges (where available; treat as directional and confirm scope)
• Peer networks and industry benchmarking groups
• Your own hiring outcomes (offer acceptance rates, time-to-fill, counteroffers)

Practical rule: build midpoint from 3–5 signals, then document what you used and why.

Step 5: Check Internal Equity Before You Publish

Ranges that “match the market” can still create internal issues like compression and inconsistency.

Equity Check 1: Compa-ratio (quick and useful)

Compa-ratio = employee base salary ÷ range midpoint

Example midpoint: $100,000

• $90,000 salary → compa-ratio 0.90
• $110,000 salary → compa-ratio 1.10

Healthy distributions vary, but a simple interpretation is:

• 0.80–0.90: developing/new to level
• 0.90–1.10: solidly in level
• 1.10–1.20: high in level; promotion pressure may be building

• 1.20: likely out of range, or range needs review

Equity Check 2: Progression between levels should make sense

Make sure your level-to-level structure doesn’t create awkward outcomes.

Red flag example:

Level 2 midpoint is close to Level 3 minimum, so promotions don’t come with meaningful increases.

Fixes include:

• Increase the senior level midpoint
• Narrow the lower level spread
• Re-check job matching/levelling (common root cause)

Equity Check 3: Award / enterprise agreement alignment (where relevant)

If parts of your workforce are covered by an award or enterprise agreement, confirm:

• Your minimums don’t undercut minimum rates
• Allowances, penalties, and classifications are considered correctly
• Your “range” isn’t accidentally conflicting with the formal classification structure

(You can still run ranges for consistency—but they must fit within the formal framework.)

Practical Worked Examples

Example 1: Build ranges for a three-level professional stream (base salary)

Let’s say your midpoints are:

• Level 1 midpoint: $70,000
• Level 2 midpoint: $85,000
• Level 3 midpoint: $105,000

Choose spreads:

• L1: 30% (±15%)
• L2: 40% (±20%)
• L3: 50% (±25%)

Level 1 (30%)

• Min $59,500 | Mid $70,000 | Max $80,500

Level 2 (40%)

• Min $68,000 | Mid $85,000 | Max $102,000

Level 3 (50%)

• Min $78,750 | Mid $105,000 | Max $131,250

Now sanity-check:

• Do promotions usually allow a meaningful increase?
• Are you comfortable with overlap (a strong L2 can sit near a developing L3)? Often yes.

Example 2: Hiring placement using range position

Range: $80,000–$100,000–$120,000 (base)

Practical placement guide:

• Developing hire: 85–95% of midpoint → $85k–$95k
• Fully proficient hire: 95–105% of midpoint → $95k–$105k
• Scarce skills / exceptional match: 105–115% of midpoint → $105k–$115k (check equity carefully)

If your internal team has incumbents around $98k–$102k, offering a new hire $112k may create compression unless there’s a clear, documented reason.

Example 3: Handling someone already above maximum

Employee: $125,000 base

Range max: $120,000 base

Common options (choose a policy and apply consistently):

• Red-circle: pause base increases; use a one-off payment or bonus if needed
• Re-level/promotion review: are they actually performing at the next level?
• Range refresh: if the market shifted materially, update midpoints and spreads

Quick Implementation Checklist

1. Confirm job matches and levelling (don’t rely on titles)
2. Choose a market anchor for midpoint (and define base vs TRP)
3. Set spreads by level (start with 30/40/50 as a simple ladder)
4. Calculate min and max from midpoint
5. Run internal equity checks (compa-ratio, compression, level progression)
6. Validate compliance considerations (awards/EAs where applicable)
7. Document rules for offers, promotions, and pay reviews