How to Create Salary Ranges

Step 1: Build or Confirm the Job Architecture

Salary ranges should be attached to a defensible job framework. Before setting numbers, employers should identify job families, levels and role boundaries and confirm which jobs are comparable in value. Article 4 of the Directive reinforces the importance of objective, gender-neutral assessment using factors such as skills, effort, responsibility and working conditions. If job architecture is inconsistent, salary ranges can preserve old inequities rather than solve them. Historical salary should therefore not be the main reason a job is placed at a particular level or assigned a particular range.

Step 2: Choose the Market-Reference Method

Employers commonly use salary surveys, reputable compensation datasets, collective agreements or other market evidence to understand external pay levels. The methodology should define which labour market is relevant, which organisations or sectors are appropriate comparators, which geographic area is being considered and how jobs are matched to survey roles. Market data is evidence, not an automatic answer. If a survey reflects historical undervaluation of work concentrated among women, copying the market without review can reproduce that undervaluation. External competitiveness should therefore be considered alongside internal job value and equal-pay analysis.

Step 3: Set a Reference Point for Each Range

Many salary structures use a midpoint or another reference value as the central anchor for a range. The reference point may reflect a chosen market percentile, an internal compensation policy or a collectively agreed rate. Employers should document why the reference point was selected and apply the method consistently across comparable jobs. Different market positions can be justified for different talent segments, but unexplained differences between jobs of comparable value can create pay-equity risk. The reference value should therefore be part of a broader compensation strategy rather than an isolated number copied from a survey table.

Step 4: Choose the Range Width and Calculate Minimum and Maximum

Once a reference point is established, the employer decides how much room the range should provide below and above it. Narrow ranges can fit roles with limited variation in proficiency, while wider ranges may be used where jobs allow substantial growth without promotion. There is no universal percentage required by the Directive. The chosen width should reflect the organisation's career model, market volatility, progression philosophy and ability to administer the range consistently. Minimum and maximum values should be calculated according to a documented formula so that similar grades or levels are treated consistently.

Step 5: Test the Structure Before Publishing It

A technically neat range structure can still produce unequal outcomes. Employers should map current employees into the proposed ranges and review employees below minimum, above maximum and at materially different positions within comparable ranges. The review should be broken down by sex where the data and legal framework permit, and significant differences should be investigated. The purpose is not to force identical salaries but to determine whether differences can be explained by objective, gender-neutral factors. Testing can also reveal compression, outdated ranges or jobs that have been classified inconsistently.

Step 6: Define Hiring, Progression and Exception Rules

A salary range becomes useful only when the employer explains how individual pay is set within it. Entry pay might depend on relevant experience, demonstrated skills, qualifications or another job-related factor. Progression might depend on sustained performance, increased capability or seniority where lawful and appropriate. Article 6 requires pay, pay-level and pay-progression criteria to be objective, gender neutral and easily accessible to workers, subject to the small-employer provision on progression. Employers should also define who can approve exceptions and what evidence must support an above-range or unusual pay decision.

Step 7: Review Salary Ranges on a Defined Cycle

Ranges should not be treated as permanent once published. Market conditions, collective bargaining, inflation, changes in job content and internal equity findings can all justify review. Employers should establish a review cadence and record the data used, decisions made and effective dates. When ranges change, the organisation should also assess what happens to employees whose salaries fall below a new minimum or whose positions within the range change materially. Version control is important because later pay-equity analysis may require the employer to explain which range and which criteria applied when a historical pay decision was made.

Frequently Asked Questions

Related Guides

• minimum, midpoint and maximum salary values
• building transparent pay structures and salary bands

Official Sources

• Directive (EU) 2023/970 - Articles 4, 5 and 6