How to Determine an Employee’s Salary

How to Determine an Employee’s Salary
  • Opening Intro -

    If you are planning to hire a new employee, especially one for a newly created position, determining salary can be one of your biggest challenges.


You may have a salary range in mind, but your pay scale may not be correct. You can determine the correct salary range and the salary to offer by making use of important government data at no charge to you.


The US Bureau of Labor Statistics collects, compiles and broadcasts information about thousands of jobs and career information through its website at Specifically, its online Occupational Outlook Handbook provides a searchable database of information about particular positions including what that professional does, the work environment, guidance on how to pursue that career along with pay and job outlook.

National Pay Scale

The BLS site provides pay information based on national averages and breaks that down further by providing averages by pay percentile including 10th, 25th, median, 75th and 90th percentiles. Both hourly and yearly data is shared.

State Pay Scales

Pay for your area may differ greatly from another state. That is why the BLS provides salary averages based on a state-by-state breakdown. You can pull up data from every state as well as from territories such as Puerto Rico and the Virgin Islands to determine how your area stacks up against the other states.

Metropolitan Pay Scales

The BLS makes it possible for researchers to dig even further, by pulling up metropolitan area salary averages for specific job titles. A spreadsheet is rendered and is suitable for download. The advantage of pinpointing pay by metropolitan area is that salaries reflect what people make specific to their community. For instance, you can learn what a registered nurse makes in New York City and compare that rate with Albany, Syracuse, Buffalo or other metropolitan area.

Industry Averages

The BLS also attempts to show differences in salaries by industry. For instance, a pharmacy technician working in a hospital might earn $32,400 per year while that individual would earn $25,780 per year on average working at a department store. These differences are important and can help you stay competitive as you look for the best candidates.

Salary Determination

With the current and accurate information in hand, you can determine a salary range for your new employee. You might want to balance that information with what your competitors pay, details that might be harder to ascertain.

Ultimately, your compensation package should be based on a number of factors including your location, the candidate’s experience, job responsibilities and your industry. Provide your most competitive offer and you’ll attract the best people to your company.

See Also5 Ways to Maximize Your Worth


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Categories: Small Business

About Author

Matthew C. Keegan

Matt Keegan is a freelance writer and editor as well as publisher of "Matt's Musings", his personal blog. Matt covers campus, consumer, business and financial topics on various websites and blogs, and has been published in the "Houston Chronicle", "Sam's Club Magazine" and "Wisconsin Golfer".