How Wide Should Salary Bands Be?

Salary Band Width Is the Distance Between the Minimum and Maximum

A salary band normally has a minimum, a midpoint and a maximum. Band width describes how large the range is from the lower boundary to the upper boundary. Compensation teams often express that width as a percentage or range spread so different grades can be compared consistently. The exact formula used should be documented because organisations do not always describe range spread in the same way. What matters operationally is that the minimum and maximum create a meaningful pay opportunity for the jobs assigned to the band. If the boundaries are too close together, normal progression can quickly push employees beyond the maximum. If they are too far apart, the band may become too broad to explain why one worker is paid near the bottom and another near the top.

There Is No Universal Percentage That Every Employer Should Use

Compensation practice sometimes uses standard-looking range spreads, but these are design conventions rather than a legal formula that applies to every employer. An organisation with highly structured entry, intermediate and senior levels may prefer narrower ranges because employees move to a new grade as responsibility grows. Another organisation may keep workers in one level for a longer career period and therefore need a wider salary opportunity within that level. Market volatility, scarcity of specialist skills, collective bargaining arrangements and geographic strategy can also affect range design. Employers should therefore be cautious about copying another company's percentage without understanding the job architecture that sits behind it.

Narrower Bands Can Create Clearer Boundaries

A narrower salary band can make it easier to define the pay opportunity associated with one job level. Hiring offers, progression and promotion decisions have less room to vary, which can reduce uncontrolled discretion. Narrow ranges can work particularly well where job levels are clearly differentiated and employees are expected to move to another grade when responsibility increases materially. The trade-off is that a narrow range may provide limited room for recognising sustained development without promotion. If the organisation has too many narrow grades, it can also create pressure for frequent title or grade changes simply to deliver salary growth. Range design should therefore be coordinated with the career framework rather than decided by compensation in isolation.

Wider Bands Provide Flexibility but Need Stronger Controls

A wider band can accommodate a larger spread of capability, experience or market positioning within one organisational level. That flexibility can reduce the need for frequent regrading and can support broad career stages. The risk is that a very wide band may permit large salary differences between workers who appear to occupy the same level. Those differences need to be explainable through objective criteria. Employers using wide bands should define how hiring pay is set, what factors justify movement, what evidence is required for increases and how outliers are reviewed. A wide range without placement rules can recreate the same discretionary pay problems that the structure was intended to reduce.

Range Width Should Reflect the Amount of Legitimate Progression Within a Level

One practical design question is how much growth can occur before the job itself becomes a higher-level role. If an employee can develop substantially in proficiency while the core scope and responsibility of the job remain the same, the range may need enough room for that progression. If advancement normally involves a clear change in responsibility, decision-making authority or job complexity, a narrower band with a promotion into the next grade may be more logical. The employer should document the difference between progression within a range and movement to a higher-level job so that salary growth does not depend on inconsistent manager interpretation.

The Directive Focuses on Objectivity Rather Than a Particular Range Spread

Directive (EU) 2023/970 requires Member States to ensure that employers have pay structures supporting equal pay for equal work or work of equal value. Article 4 requires comparison of work value through objective and gender-neutral criteria such as skills, effort, responsibility and working conditions. Article 6 requires workers to have access to the criteria used to determine pay, pay levels and pay progression, and those criteria must be objective and gender neutral. Neither provision prescribes a specific salary-band width. The compliance question is therefore whether the structure and its decision rules can explain pay differences fairly, not whether an employer has selected a particular percentage spread.

Review Range Width When the Structure Produces Repeated Exceptions

Range design should not be treated as permanent. Employers should review bands when they see repeated above-range hires, frequent salaries below minimum, compression near one boundary, large unexplained differences within comparable roles or constant requests for off-cycle exceptions. Those patterns may show that the range is too narrow, too wide, poorly positioned to the market or assigned to the wrong jobs. A review should distinguish a structural problem from an individual pay issue. Employers should record why a band is changed, which jobs are affected and how existing employee pay will be handled so later decisions can be reconstructed and tested for consistency.

Frequently Asked Questions

Related Guides

• how to create salary ranges
• minimum midpoint and maximum salary

Official Sources

• Directive (EU) 2023/970 - Article 4
• Directive (EU) 2023/970 - Article 6