Calculation Methodology
Last updated: January 2025
This page explains how Income Gap Report calculates your salary gap, what data we use, and the limitations of our estimates.
Step 1: Experience Level Classification
We convert your years of professional experience into a standardized experience level used to look up the appropriate benchmark:
| Years of Experience | Experience Level |
|---|---|
| 0–2 years | Entry |
| 3–6 years | Mid |
| 7–12 years | Senior |
| 13+ years | Lead |
Note: These thresholds are general approximations. Individual career paths vary significantly.
Step 2: Benchmark Lookup
We attempt to find a matching salary benchmark using the following priority order:
- 1
Exact match
Same job title, same city, same experience level from our curated benchmark database.
- 2
Live database lookup
Query our Supabase database for benchmarks contributed from market data surveys.
- 3
Closest experience level
If the exact experience level is unavailable, we use the closest level for the same role and location.
- 4
Same title, different location
If no city-specific data exists, we use a benchmark from another city and flag the result as approximated.
- 5
AI-assisted estimation
If no seeded data matches, we call a language model to estimate market compensation. Results are marked as AI-estimated and carry a higher uncertainty margin.
Step 3: Gap Calculation
income_gap = benchmark_median − current_salary
positive value = potentially underpaid
zero or negative = at or above median
The gap is calculated against the median salary for your role, experience level, and location — not the mean. Medians are more representative because they are less influenced by outlier compensation at extreme ends of the distribution (e.g., equity-heavy FAANG packages).
Step 4: Percentile Rank
We estimate your percentile rank using a simplified linear interpolation between the min, median, and max values from the benchmark:
- •Salary below min → estimated 10th percentile or lower
- •Salary at min → approximately 10th percentile
- •Salary at median → 50th percentile
- •Salary at max → approximately 90th percentile
- •Salary above max → estimated 90th percentile or higher
This is a simplified approximation. True salary distributions are not perfectly linear and vary by role and market.
Step 5: Per-Period Breakdown
The annual gap is divided into monthly, weekly, and daily equivalents using standard calendar periods (12 months, 52 weeks, 260 working days per year).
Limitations & Disclaimers
- !Benchmarks reflect base salary only. Total compensation (bonus, equity, benefits) is not included and can vary substantially.
- !Data is aggregated from multiple survey sources and is updated periodically — not in real time.
- !Industry, company size, and individual negotiation history all affect actual compensation and are not captured.
- !AI-estimated results carry higher uncertainty than curated benchmarks and should be treated as rough directional guidance.
- !Geographic cost-of-living adjustments are not applied to the gap calculation — nominal salary figures are compared directly.