Salary range is one of those comp terms that everyone uses but few define consistently. A candidate sees it on a job posting and assumes they'll earn somewhere inside the number. An employee sees it during a comp conversation and wonders why they're below the midpoint. A manager negotiates a new hire at the top of the range and creates an internal equity problem two months later. The range is a real structural tool, but it only works if everyone interprets it the same way. Pay transparency laws in 2026 have made the stakes higher: a poorly designed range on a job posting can trigger complaints, lawsuits, and scrutiny from state enforcement agencies.
How Salary Ranges Are Constructed A typical range has three anchor points: the minimum, midpoint, and maximum. The midpoint is set to the 50th percentile of market pay for the role, based on benchmarking data from surveys. The minimum is typically 15 to 25 percent below the midpoint. The maximum is typically 15 to 25 percent above. The result is a range width of 30 to 50 percent from min to max.
Range width varies by job level and function. Entry-level roles often use narrower ranges because the scope is more defined. Senior and executive roles use wider ranges because scope, impact, and performance vary more. Engineering and specialized technical roles often need wider ranges than standard knowledge work.
How Wide Should a Salary Range Be? The usual rule is: narrower for simpler, more standardized roles; wider for roles with greater variability in scope and impact. A 30 percent range (min to max) works for most individual contributor roles. A 60 to 80 percent range is common at the director and VP level, where scope ranges dramatically across roles with the same title.
Pay Transparency Laws Changed the Range Conversation As of 2026, multiple states require pay ranges in job postings. California, Colorado, New York, Washington, Hawaii, and Illinois have explicit requirements, and more states are considering them. The rules vary on what exactly must be posted (some require good faith estimates, others require the actual range), on whether internal transfers need ranges, and on remote roles that can be filled from anywhere.
Employers that were treating ranges as internal tools now face public scrutiny. A range posted at $80,000 to $200,000 signals that the employer either hasn't thought about pay structure or is deliberately posting a wide range to avoid commitment. Neither reads well to candidates or regulators.
What If the Posted Range Doesn't Match What You Actually Pay? If an employee inside the company is paid below the posted range for their own role, the gap becomes visible the moment a new candidate is hired into the range. This is one of the fastest-growing sources of pay equity litigation. Audit internal pay against any range you post externally, and address gaps proactively before they become complaints.
Using Salary Range in Pay Decisions Ranges drive four routine decisions: new hire pay, merit increases, promotion pay, and market adjustments. New hires typically start between the minimum and the midpoint, based on experience. Merit increases are scaled against position in the range, with larger increases for employees below midpoint and smaller (or no) increases for employees at or above maximum. Promotions move the employee to a new range. Market adjustments shift the whole range up or down.
Employees near the maximum of their range pose a specific challenge: strong performers with no room to grow their pay without a promotion. Addressing this through career-path design, skill-based pay premiums, or one-time bonuses keeps top performers engaged even when the range is topping out.
Designing Salary Ranges for 2026 Compliance Well-designed salary ranges are grounded in current market data, published internally so managers can explain pay decisions, and audited for alignment with external postings. Run a comp benchmark refresh at least annually, and sooner when market rates move rapidly. The Bureau of Labor Statistics National Compensation Survey is a starting benchmark, supplemented by paid survey data for specialized roles. The Department of Labor Women's Bureau publishes resources on pay transparency compliance. For the broader grade structure that houses salary ranges, see salary grade .
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