Pay range vs pay band: which one belongs in the job posting

"Pay band" and "pay range" are often used as if they meant the same thing. For a posting, the difference matters. A pay band is the internal structure for a level of jobs: it runs from what a new entrant is paid to what a long-tenured expert in the same level might earn. The range a job posting needs is narrower: what you expect to pay the person you hire for this opening. Posting the whole band can look generous and still fail the good-faith test most pay transparency laws apply. This page defines the terms, shows how to derive a posted range from a band, and covers the questions this raises with candidates and employees.

The terms

What the laws say the posted figure is

None of the US laws we cover say "post your pay band." They describe an expectation about this hire.

• California: "a good faith estimate of the salary or hourly wage range that the employer reasonably expects to pay for the position upon hire" (Labor Code 432.3(m)).
• New York: the minimum and maximum "that the employer in good faith believes to be accurate at the time of the posting" (Labor Law 194-b).
• Colorado: the range for the specific opening, not a company-wide band for the job title, as the Colorado guide describes.
• Ontario: expected compensation or a range of expected compensation, capped at $50,000 in the posting. The province's guide adds that the cap applies only to what is posted and does not stop the employer from using a wider internal range.

The pattern: a band is a management tool; a posted range is a representation to a candidate about this job. If a band runs to a maximum nobody is hired at, posting that maximum misstates the opening.

How to derive the posted range from a band

An example, with illustrative figures. A band for a level-3 analyst:

Band minimum:   $70,000
Band midpoint:  $85,000
Band maximum:  $100,000   (spread: about 43% of the minimum)

In the last two years, new hires at this level landed between $74,000 and $88,000. Nobody was hired above $90,000; incumbents above that are people promoted in place or with long tenure. A defensible posted range is something like $72,000 to $90,000: it includes the band minimum area where a minimum-bar hire would land, and runs to just above the midpoint, where a fully proficient hire would land. The top tenth of the band is excluded because the employer does not expect to hire there.

Rules of thumb that follow from the example:

1. Start from real hiring outcomes, not the band edges.
2. Include the band minimum only if you would actually hire at it.
3. Cap the posted maximum at the most you would pay a new hire, typically somewhere around or above the midpoint for experienced external hires, depending on your pay philosophy.
4. Check the spread against Ontario's $50,000 cap and New Jersey's proposed 60% rule if those places are in scope.

How to set salary ranges for job postings covers the full process, including employers that do not have bands yet.

Variations you will meet

Step rates for hourly and unionized roles

Many hourly jobs, and most jobs covered by a collective agreement, use steps instead of an open band: a starting rate and fixed increases after set periods. Here the posted figure is simple. If every new hire starts at step 1, post the step 1 rate as a fixed wage; Washington's statute expects a fixed amount when only one is offered. If experienced hires can start at a higher step, post the range of steps a new hire could start on, not the top step reached after years. Under the EU directive, applicants are also entitled to the relevant collective agreement provisions for the position.

Broad bands

Some employers use a few very wide bands, each covering several levels. A broad band can span 100% or more from minimum to maximum, which is far too wide to post and would breach Ontario's cap and New Jersey's proposed spread rule. With broad bands, the posted range has to come from hiring data for the specific job, because the band itself says little about what a new hire earns.

Location-adjusted bands

Employers with geographic pay usually keep one national band and apply a location factor, or keep separate bands per zone. Either way, the posting needs the range for the location of the hire, and a remote posting may need several. See pay transparency for remote jobs.

Sales roles

For roles with large variable pay, the band usually governs base pay and a separate target governs total pay. Post the base range and describe the variable component, rather than posting an on-target-earnings band as though it were guaranteed.

When there is no band

Many small employers have no formal structure. That is not a problem for posting; the hiring range is built directly from what incumbents earn, recent offers and market data. It does become a problem the second or third time the same job is posted with a different range, because the postings themselves become a public record of how pay for the job has moved. A simple band for each level, even a rough one, keeps postings consistent. Under the EU Pay Transparency Directive, employers in member states will need pay structures based on objective, gender-neutral criteria anyway.

Questions this raises, and how to answer them

"What is the top of the band?"

Candidates, especially experienced ones, ask whether there is room to grow. You can say the posted range is the hiring range and that the band for the level goes higher with tenure and performance, without promising a number. If your employer shares band maximums internally, check before sharing them externally.

"Why does the posting say less than my colleague earns?"

Employees read your postings. If a posted range sits below what an incumbent earns, the explanation is usually tenure or performance within the band, which is fine if it is true and documented. If a posted range sits above what incumbents earn, the explanation had better exist before the ad goes up; see pay equity audit before posting ranges.

"Can you go above the range?"

Sometimes. British Columbia's guidance says its posting rule does not stop an applicant asking for, or an employer agreeing to, more than advertised. But an offer above the posted top needs approval and a written reason, and if it happens often the posted range is wrong. The offer approval form template has a field for the exception reason.

Keeping bands and postings in sync

• Review bands on a fixed cycle, and re-derive posted ranges for open reqs when bands move.
• Record which band each posting was derived from, with the date, in the requisition.
• Watch where offers land. If new hires cluster at the top of the posted range, the band midpoint is probably behind the market.
• Plan headcount against bands, not just budgets. The headcount planning template is a good place to record the band for each planned role.

For the rules on what else must sit next to the range in a posting, see pay transparency laws by state.