Range penetration is the salary metric that shows how far an employee’s pay has moved through their salary range, from 0% at the minimum to 100% at the maximum. The range penetration formula is simple: (salary − minimum) ÷ (maximum − minimum). An employee earning €53,000 in a €48,000–€60,000 range sits at about 42% of the range.
For HR and compensation teams, it is one of the fastest ways to spot pay outliers, flight risks and stalled progression, and to check that salary bands are being used as intended. It complements compa-ratio, which only compares pay with the midpoint.
This guide covers the formula, worked examples built on real 2026 salary ranges from TalentUp’s job postings data, how to read the result, an Excel template, and why the metric matters as EU countries apply the Pay Transparency Directive.
Key takeaways
- Range penetration = (salary − minimum) ÷ (maximum − minimum). 0% is the minimum, 100% the maximum.
- Below 0% means pay under the minimum (green circle); above 100% means pay over the maximum (red circle).
- The narrower the range, the more each euro moves penetration: in a €50,000–€60,000 range (20% wide), €1,000 is 10 points.
- The median salary range advertised in European job postings in 2026 is about 20% wide, according to TalentUp data.
- Use penetration together with compa-ratio, and review it by gender and tenure to support pay transparency.
What Is Range Penetration?
Range penetration, also called salary range penetration or position in range, describes where a salary sits between the minimum and maximum of the pay range for a role or grade. It answers a question employees, managers and now regulators increasingly ask: “why is this person paid here, and not higher in the band?”
Range penetration is useful for deciding where to place people in a band according to their experience and proficiency. A new hire typically sits in the lower part of the range, while an established, fully proficient employee should be much closer to the top.
Looking at the distribution of penetration across a team is also a diagnostic on its own. If most people cluster at one end, or long-tenured employees are stuck near the minimum, the problem is usually the band itself, not just individual pay decisions. Range design matters too:
- Narrower ranges suit early-career roles, where people are likely to be promoted into a new band fairly quickly.
- Wider ranges help retain mid- and late-career employees, who are more likely to grow within their current role than to change it.
Range penetration = (Salary − Range minimum) ÷ (Range maximum − Range minimum) × 100
You need three inputs: the employee’s salary, and the minimum and maximum of the range that applies to their role and level. Use the same basis for all three: gross annual base salary is the most common, excluding bonus and benefits.
| Result |
Where the salary sits |
What it usually means |
| Below 0% |
Under the range minimum |
Green circle: underpaid against the structure, fix as a priority |
| 0–33% |
Bottom third |
New hire or still learning the role |
| 34–66% |
Middle third |
Developing; around the midpoint in a symmetric range |
| 67–100% |
Top third |
Fully proficient or high performer |
| Above 100% |
Over the range maximum |
Red circle: overpaid against the structure, or due a promotion |
The midpoint is at 50% only when the range is symmetric around it, which is the case in most structured pay bands.
Range Penetration Examples with Real 2026 Salary Ranges
The examples below use typical salary ranges advertised in job postings in 2026: the median posted minimum and the median posted maximum for the role, from TalentUp’s job postings database (see the methodology below).
Example 1: Software engineer in Spain
Software engineer postings in Spain with an annual salary range in euros (about 100 postings, January–September 2026) advertise a typical range of €48,000 to €60,000. A candidate is offered €53,000:
- Range penetration = (53,000 − 48,000) ÷ (60,000 − 48,000) = 5,000 ÷ 12,000 = 41.7%
- Compa-ratio = 53,000 ÷ 54,000 (midpoint) = 98.1%
The offer sits in the developing zone, slightly below the midpoint, which is coherent for a candidate who meets most but not all of the requirements.
Example 2: Accountant in the United Kingdom
Accountant postings in the UK with an annual salary range in pounds (about 320 postings) advertise a typical range of £43,200 to £50,000. An existing employee earns £49,000:
- Range penetration = (49,000 − 43,200) ÷ (50,000 − 43,200) = 5,800 ÷ 6,800 = 85.3%
- Compa-ratio = 49,000 ÷ 46,600 (midpoint) = 105.2%
The employee is in the top third of the range. That is right for a fully proficient accountant, but there is only £1,000 of headroom before the maximum: the next pay review should look at a promotion path or a shift towards variable pay rather than another large base increase.
How Range Width Changes the Picture
The same euro increase means very different things in a narrow and a wide range. TalentUp’s analysis of about 207,000 European job postings that advertised a salary range between January and September 2026 shows how widely range widths vary.
~20%
median width of advertised salary ranges in Europe
11% to 34%
width of the middle half of ranges (25th to 75th percentile)
1 in 10
posted ranges is more than 56% wide
Source: TalentUp job postings database, January–September 2026, 13 European countries.
Width is measured as (maximum − minimum) ÷ minimum, so a 20% range is, for example, €50,000–€60,000. Here is what that means for range penetration, for an employee moving from €50,000 to €51,000:
| Range |
Width |
Points of penetration per €1,000 |
Compa-ratio at 75% penetration |
| €50,000–€60,000 (median posted range) |
20% |
10.0 points |
104.5% |
| €50,000–€78,250 (90th percentile) |
56.5% |
3.5 points |
111.0% |
Two lessons follow. In narrow ranges, penetration moves fast: a single merit increase can take someone from the middle to the top of the range, so the promotion conversation comes sooner. In wide ranges, compa-ratio and penetration diverge: an employee at 75% penetration is 11% above the midpoint, which is easy to miss if you only track one of the two metrics.
Median posted range width also differs by country:
| Country |
Median posted range width |
Postings with a range |
| Italy |
15.7% |
~15,000 |
| United Kingdom |
18.3% |
~38,000 |
| Spain |
18.5% |
~86,000 |
| France |
19.9% |
~16,500 |
| Poland |
22.1% |
~25,000 |
| Ireland |
22.4% |
~3,100 |
| Switzerland |
26.5% |
~1,000 |
| Austria |
28.2% |
~1,500 |
| Sweden |
28.3% |
~3,900 |
| Netherlands |
29.1% |
~9,100 |
| Belgium |
29.5% |
~1,200 |
| Portugal |
31.8% |
~900 |
| United States (for comparison) |
24.6% |
~259,000 |
Keep in mind that a posted hiring range is not a full pay band. Employers usually advertise the part of the band they are prepared to offer a new hire, so internal bands are typically wider than the ranges in job ads. For more on publishing ranges, see our guide to transparent salary job postings.
Range Penetration vs. Compa-Ratio
Range penetration and compa-ratio are often confused, but they answer different questions:
|
Range penetration |
Compa-ratio |
| Formula |
(Salary − Min) ÷ (Max − Min) |
Salary ÷ Midpoint |
| Reference |
The whole range |
The midpoint only |
| Question it answers |
How far has this person progressed, and how much room is left? |
Is this person paid above or below the target rate for the role? |
| At the minimum |
0% |
Depends on width (e.g. 90.9% in a 20% range) |
| Most useful for |
Progression, promotion timing, headroom |
Competitiveness against the market and internal target |
In a symmetric range, the two are linked: compa-ratio = 1 + (penetration − 0.5) × (max − min) ÷ midpoint. That is why the same compa-ratio can mean very different positions depending on how wide the band is. A compa-ratio of 105% is near the top of a narrow range, but only just above the middle of a wide one. Comp teams usually run both numbers side by side.
How to Calculate Range Penetration in Excel
With the salary in column B, the range minimum in C and the maximum in D:
- In E2, enter =(B2-C2)/(D2-C2) and format the cell as a percentage.
- To avoid errors when a range is missing, use =IFERROR((B2-C2)/(D2-C2),“”).
- Add a zone label in F2: =IF(E2<0,“Below range”,IF(E2<=0.33,“Bottom third”,IF(E2<=0.66,“Middle third”,IF(E2<=1,“Top third”,“Above range”)))).
- Use conditional formatting to highlight values below 0% and above 100%, and add compa-ratio in another column with =B2/((C2+D2)/2).
Then pivot the results by grade, department, tenure and gender. Averages hide a lot: look at the distribution in each band, not just the mean.
What Counts as a Healthy Range Penetration?
Most compensation teams treat the range as a set of zones linked to proficiency rather than a single target number:
- 0–33% (entry/learning): typically a new hire or someone still ramping up. An employee with long tenure stuck here is a retention risk.
- 34–66% (developing): employees building proficiency, who should be moving towards the upper half of the band over the following review cycles.
- 67–100% (proficient): the target zone for fully competent, experienced employees.
- Above 100% (red circle): the options are to promote, freeze base pay and use one-off or variable pay, or accept that there is no more room to grow inside this grade.
- Below 0% (green circle): bring the salary at least to the minimum, unless there is a documented, temporary reason.
Two combinations deserve attention. High penetration and long tenure usually means a promotion conversation is overdue. Low penetration and strong performance means an employee is underpaid relative to their contribution, which becomes a retention risk if it persists beyond one merit cycle.
Many organisations build this into a merit matrix: for the same performance rating, employees low in the range receive larger percentage increases and those high in the range smaller ones. That moves people towards the right zone over time while keeping the budget under control. When budgets are tight, non-salary levers help, as covered in what HR can offer when there is no raise budget.
How Companies Use Range Penetration
- Pay equity reviews: compare average and median penetration by gender, age group or location for the same grade. Systematic differences that tenure and performance do not explain are a red flag. See market salaries vs internal equity for how to balance both.
- Offer setting: place new hires consistently, for example in the bottom third unless the candidate clearly exceeds the requirements, so they do not land above colleagues who are already proficient.
- Merit and promotion planning: identify who is near the top of the range and needs a promotion path, and who is low in the range and should receive a larger increase.
- Band maintenance: if many employees sit above 100% or below 0%, the band, not the people, needs updating. Our guide on how to create a good salary band explains how to set and refresh them.
- Communicating pay: showing employees where they sit and what moves them up the range makes pay progression concrete and easier to accept.
Range Penetration and the EU Pay Transparency Directive
Range penetration is becoming more than an internal HR metric. Under Directive (EU) 2023/970, which member states had to transpose by 7 June 2026, employers must, as national laws apply:
- give candidates the initial pay or its range before the interview;
- make easily accessible to workers the criteria used to determine pay, pay levels and pay progression, which must be objective and gender-neutral (member states may exempt employers with fewer than 50 workers from the pay progression part);
- answer workers’ requests for information on their individual pay level and the average pay levels, broken down by sex, for workers doing the same work or work of equal value.
Range penetration is exactly the kind of internal evidence you need here. If two employees in the same band, with similar tenure and performance, show very different penetration, you should be able to explain why with documented criteria. In pay discrimination cases the burden of proof shifts to the employer, and from 7 June 2027 employers with 250 or more workers report on their gender pay gap every year, with employers of 150–249 workers reporting every three years. If a gender gap of 5% or more in a category of workers is not justified by objective criteria and not remedied within six months, a joint pay assessment is required.
Not every country has transposed the Directive yet, so check the national rules where you employ people. For the full picture, see our guide on how HR teams can prepare for the EU Pay Transparency Directive and the pay transparency hub.
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