Pay Equity Analysis Calculator — Compare Two Salaries
A pay equity comparison is arithmetic: subtract the lower pay from the higher pay, then express that gap as a percentage of each. Enter two people's pay for the same or comparable work and the calculator returns the gap in dollars, the share by which the lower-paid person sits below the higher-paid one, the raise it would take to reach parity, and what the gap compounds to over the years still to be worked.
A gap is a measurement, not a conclusion. Tenure, location, shift, credentials, hours and performance can explain part or all of a difference, so a raw gap is not by itself evidence of unlawful discrimination. This is a calculator, not legal advice.
How the pay gap is calculated
Comparing two people's pay for like work takes three steps, and each one produces a different number that answers a different question.
- The dollar gap. Higher pay − lower pay. This is the amount of money at stake in a single year.
- The gap as a share of the higher pay. Gap ÷ higher pay × 100. This is the figure usually quoted as "paid X% less".
- The raise needed to reach parity. Gap ÷ lower pay × 100. This is the figure a compensation team needs, because a raise is applied to the lower salary.
Those last two are never the same number, and mixing them up is the most common error in this kind of analysis. If one person earns $88,000 and another earns $79,500, the lower-paid person is paid 9.66% less — but it takes a 10.69% raise to close the gap.
The cumulative figure assumes both people receive the same percentage raise every year, which keeps the gap growing at that same rate. Over n years the total is gap × ((1 + r)n − 1) ÷ r.
Worked example
Two accountants sit in the same team, hold the same certification, work the same schedule and carry comparable portfolios. One is paid $88,000, the other $79,500. Accountants earn a national median of $83,680 a year, per BLS OEWS May 2025, so both sit either side of the middle of the range.
- Dollar gap: $88,000 − $79,500 = $8,500 a year
- As a share of the higher salary: $8,500 ÷ $88,000 = 9.66%
- Raise needed to reach parity: $8,500 ÷ $79,500 = 10.69%
- Per hour, at 2,080 hours: $8,500 ÷ 2,080 = $4.09 an hour
- Over 15 more working years, with both getting 3% raises: $8,500 × ((1.0315 − 1) ÷ 0.03) = $158,090.77
The last line is why a gap that looks small in a single pay period is worth measuring. A difference of $327 per biweekly check compounds into six figures because every future raise is a percentage of a smaller base.
Running a like-for-like comparison
The arithmetic is only as good as the pairing. Before comparing two people, line up the things that legitimately move pay:
- Same or comparable work. Similar skill, effort, responsibility and working conditions — not just the same job title. Two people can share a title and hold very different scopes.
- Same labor market. A role priced for one metro is not comparable to the same role priced for another without adjusting.
- Same pay basis. Convert everything to one basis first. Hourly × hours per year, or annual ÷ hours per year.
- Same components. Compare base to base, then total cash to total cash. Bonuses, differentials and equity change the answer and should be measured separately, not blended in silently.
- Recorded reasons. Tenure, step in a seniority system, licences held, measured performance ratings, date of hire and the market rate on that date. Write them down alongside the numbers.
When this applies
- An employer running a periodic pay review. Use the pairwise gap as a screen to decide which groups deserve a closer look, not as a verdict.
- Budgeting a correction. The parity percentage is the number that goes into the merit spreadsheet.
- An employee checking their own position. If you have a reliable figure for a colleague doing comparable work, this tells you the size of the difference and what raise would close it.
- Preparing for a compensation conversation. Bringing the parity percentage and the comparable-work reasoning is more useful than bringing the raw gap alone.
Common mistakes
- Quoting the wrong percentage. "Paid 10% less" and "needs a 10% raise" describe different amounts of money.
- Comparing job titles instead of jobs. Title inflation is uneven across teams, and scope is what pay tracks.
- Comparing base pay against total compensation. Run each component separately.
- Ignoring hours. An annual salary for 45 scheduled hours is not comparable to one for 37.5 without converting to an hourly basis first.
- Treating a two-person comparison as a pattern. Two data points cannot show a trend. Employers looking at group differences need every comparable employee, not a hand-picked pair.
- Drawing a cause from the number. The calculator measures the gap. It cannot tell you why the gap exists, and the explanation matters more than the size.
Frequently Asked Questions
Related job pages
Pay comparisons are most often run in roles with large teams doing similar work. These pages carry the current wage range for each one.
Wage figures above are the national median for each job from the U.S. Bureau of Labor Statistics, Occupational Employment and Wage Statistics, May 2025.