Salary bands
A salary band is the pay range your organization allows for a grade, for example Grade L3: 6,00,000 to 9,00,000 a year. When someone sets or revises a salary, the app compares it with the band and warns if it is too low or too high.
Bands help you:
- keep pay consistent for people in the same grade
- catch typing mistakes, such as an extra zero, before a salary is approved
- make sure every exception has a recorded reason for audit
- see how a salary compares with the market rate for the grade (the compa-ratio)
Salary bands are optional. Find them in Payroll configuration → Salary bands.
Create a band
- Go to Payroll configuration → Salary bands and select Add band.
- Fill in the fields below and save.
| Field | What it does |
|---|---|
| Grade | The grade the band applies to. Required. |
| Currency | The band is used for salaries paid in this currency. Required. |
| Basis | What is compared with the band: Total Package (annual gross pay plus employer contributions) or Gross (monthly gross × 12). Required. |
| Minimum | The lowest annual amount in the band. Required. |
| Midpoint | Optional. The target salary for the grade, used to work out the compa-ratio. |
| Maximum | The highest annual amount in the band. Required. |
| Effective from / Effective to | The dates the band applies. Leave Effective to empty for no end date. |
| Active | Inactive bands are ignored. |
Enter all amounts as annual amounts.
To change a band for a new year, end the current band with an Effective to date and add a new band from the next day. Past salaries are still checked against the band that applied on their effective date.
When the band is checked
The band is checked when a salary revision is previewed or saved, including revisions created from salary batches.
- The app takes the employee's grade and the currency of the pay structure's payroll policy.
- It finds the active band for that grade and currency on the salary's effective date.
- If there is a Total Package band, it compares the annual total package. If not, and there is a Gross band, it compares monthly gross × 12.
- The result is shown on the revision:
| Result | Message | What you need to do |
|---|---|---|
| Within band | Annual 7,50,000 is within the grade band of 6,00,000 to 9,00,000 (compa-ratio 1.00). | Nothing. |
| Below band | Annual 5,40,000 is below the grade band of 6,00,000 to 9,00,000. Add a reason in remarks to continue. | Enter a reason in Remarks. |
| Above band | Annual 9,60,000 is above the grade band of 6,00,000 to 9,00,000. Add a reason in remarks to continue. | Enter a reason in Remarks. |
A salary outside the band is not blocked. It only needs a reason. If you save without one, you see The salary is outside the grade's band. Add a reason in remarks to continue.
In salary batches, the Band column shows Below band, Within band or Above band for each row, so you can review exceptions before approving the batch.
Compa-ratio
The compa-ratio is the salary divided by the band midpoint.
| Compa-ratio | Meaning |
|---|---|
| Below 1.00 | Paid below the target for the grade, for example a new or developing employee. |
| 1.00 | Paid exactly at the target. |
| Above 1.00 | Paid above the target, for example an experienced or high-performing employee. |
Example: midpoint 7,50,000 and annual package 6,75,000 gives a compa-ratio of 0.90. If you leave Midpoint empty, no compa-ratio is shown.
Rules the app enforces
- Maximum cannot be below the minimum.
- Midpoint must be between the minimum and maximum.
- Only one active band per grade, currency and basis may cover any date. Otherwise you see Another active band for this grade, currency and basis overlaps these dates.
- Effective to cannot be earlier than Effective from.
When no check happens
The band check is skipped, with no warning, when:
- the employee has no grade
- there is no active band for the grade and currency on the effective date