Salary range overlap calculator: the pay range overlap and pay grade overlap formula
Salary range overlap is the slice of a lower grade's pay range that the grade above it also covers. Take the lower grade's maximum, subtract the higher grade's minimum, and divide by the lower grade's width. A $60,000 to $78,000 grade sitting under a $66,000 to $85,800 grade overlaps by $12,000, which is 66.7 percent of the lower range.
You do not really get to choose that number. Once both grades use the same range spread, overlap is fixed by arithmetic: overlap equals 1 minus midpoint progression divided by range spread. Section 02 proves it, and section 03 shows the largest published salary structure in the United States obeying it to the decimal for twelve grades in a row.
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Salary range overlap calculator
Overlap
of the lower grade, worth
- Measured against the higher grade
- Measured against the combined span
- Midpoint progression
- Lower grade spread
- Higher grade spread
The salary range overlap formula, and the three answers it can give
Everybody agrees on the numerator. Overlap in dollars is the lower grade's maximum minus the next grade's minimum, and if that comes out negative you have a gap rather than an overlap. The arguments start at the denominator, because three different conventions are in circulation and none of them is labelled when a consultant quotes you a percentage.
The three conventions
overlap = (lower max - higher min) / (lower max - lower min)
overlap = (lower max - higher min) / (higher max - higher min)
overlap = (lower max - higher min) / (higher max - lower min)
Same two grades, same $12,000 of shared money, three numbers: 66.7 percent, 60.6 percent and 46.5 percent. The first is the most common and the one this calculator leads with, because it answers the question managers actually ask: how much of my grade does the grade above already cover?
The spread between those three numbers is not a rounding quibble. If your board paper says the structure runs 47 percent overlap and your consultant's benchmark says the market runs 60, you may be looking at an identical design measured two different ways. Ask which denominator before you move a single band.
One relationship ties the first two together whenever the grades share a range spread: the higher-grade figure is always the lower-grade figure divided by one plus the midpoint progression. At 10 percent progression that is a fixed 9 percent haircut, which is why the second convention reliably reports a tighter structure than the first.
Worked example
- Grade 4
- $60,000 to $78,000
- Grade 5
- $66,000 to $85,800
- Shared money
- $12,000
- Of the lower grade
- 66.7%
- Of the higher grade
- 60.6%
- Of the combined span
- 46.5%
Both grades run a 30 percent spread and the midpoints are 10 percent apart. To build the minimum, midpoint and maximum in the first place, start at the salary midpoint calculator.
Overlap is not a dial you set, it is what your other two dials leave behind
Most guidance on building a salary structure lists three design choices as if they were independent: how wide each range is, how far apart the midpoints sit, and how much the grades overlap. They are not independent. Fix any two and the third is already decided, and the relationship is simple enough to hold in your head.
When both grades share a range spread
overlap = 1 - (midpoint progression / range spread)
No dollars appear anywhere in it. A 30 percent spread with 10 percent progression is 66.7 percent overlap whether the grade starts at $38,000 or $380,000, and whether you have four grades or forty.
Here is why, in three lines. Write the midpoint as M and the spread as S. A range built symmetrically around its midpoint has a minimum of 2M divided by (2 + S) and a maximum of 2M(1 + S) divided by (2 + S). Put the next grade's midpoint at M(1 + P). Both the numerator and the denominator of the overlap formula carry the same 2M over (2 + S) factor, so it cancels, and what survives is (S - P) over S. That is 1 minus P over S.
Three consequences follow, and they are the practical part. First, if progression equals the spread, overlap is exactly zero and the structure becomes a ladder of separate steps. Second, if progression exceeds the spread you have opened a gap, and somebody at the top of a grade cannot be promoted without a raise larger than the promotion was supposed to be worth. Third, and the one that catches people, adding grades to a structure without changing the top and bottom shrinks progression, which pushes overlap up. A ten-grade ladder rebuilt as fifteen grades over the same pay span does not merely get finer, it gets much more overlapped, and each promotion stops meaning anything.
When grades carry different spreads the shortcut stops working and you need the full formula from section 01. That is common in real structures, where entry grades are kept narrow and senior grades are widened, so check the assumption before you trust the one-line version. The calculator at the top always uses the full formula.
What each choice costs you
- Widen the ranges
- Overlap goes up. Longer runway inside a grade, weaker meaning to a promotion.
- Widen the midpoint gaps
- Overlap goes down. Promotions move real money, but ceilings arrive sooner.
- Add more grades
- Progression shrinks, so overlap rises. The commonest accidental cause of a mushy structure.
- Remove grades
- Progression widens, so overlap falls. Broad-banding taken far enough reaches zero.
Deciding how many grades to run is the same decision as deciding your overlap. The grade count side is in choosing midpoint progression between grades, and the extreme case, collapsing the ladder into a few wide bands, is worked through in broadbanding for a company under 200.
| Range spread | 5% progression | 8% | 10% | 12% | 15% | 20% |
|---|---|---|---|---|---|---|
| 20% | 75.0% | 60.0% | 50.0% | 40.0% | 25.0% | 0.0% |
| 30% | 83.3% | 73.3% | 66.7% | 60.0% | 50.0% | 33.3% |
| 40% | 87.5% | 80.0% | 75.0% | 70.0% | 62.5% | 50.0% |
| 50% | 90.0% | 84.0% | 80.0% | 76.0% | 70.0% | 60.0% |
| 60% | 91.7% | 86.7% | 83.3% | 80.0% | 75.0% | 66.7% |
Computed by Wagelist from overlap = 1 - (progression / spread), for grades that share a range spread and sit symmetrically around their midpoints. Highlighted cells are above 75 percent, where adjacent grades stop being distinguishable in practice.
What the largest published salary structure in the United States actually runs
Almost every article on this subject quotes an overlap rule of thumb and cites nobody. There is no need to guess. The federal General Schedule covers roughly 1.5 million civilian employees, its rates are set under 5 U.S.C. 5332 and administered under 5 CFR part 531, and the Office of Personnel Management publishes the full base table every January. Each grade's step 1 is its minimum and step 10 is its maximum, so the overlap of the whole ladder can simply be computed. The table below does that with the 2026 base schedule.
| Grade | Minimum (step 1) | Maximum (step 10) | Range spread | Midpoint progression | Overlap with grade below | 1 - P/S |
|---|---|---|---|---|---|---|
| GS-1 | $22,584 | $28,248 | 25.1% | n/a | n/a | n/a |
| GS-2 | $25,393 | $31,953 | 25.8% | 12.8% | 50.4% | 48.9% |
| GS-3 | $27,708 | $36,024 | 30.0% | 11.1% | 64.7% | 56.9% |
| GS-4 | $31,103 | $40,436 | 30.0% | 12.2% | 59.2% | 59.2% |
| GS-5 | $34,799 | $45,239 | 30.0% | 11.9% | 60.4% | 60.4% |
| GS-6 | $38,791 | $50,428 | 30.0% | 11.5% | 61.8% | 61.8% |
| GS-7 | $43,106 | $56,039 | 30.0% | 11.1% | 62.9% | 62.9% |
| GS-8 | $47,738 | $62,057 | 30.0% | 10.7% | 64.2% | 64.2% |
| GS-9 | $52,727 | $68,549 | 30.0% | 10.5% | 65.2% | 65.1% |
| GS-10 | $58,064 | $75,479 | 30.0% | 10.1% | 66.3% | 66.3% |
| GS-11 | $63,795 | $82,938 | 30.0% | 9.9% | 67.1% | 67.1% |
| GS-12 | $76,463 | $99,404 | 30.0% | 19.9% | 33.8% | 33.8% |
| GS-13 | $90,925 | $118,204 | 30.0% | 18.9% | 37.0% | 37.0% |
| GS-14 | $107,446 | $139,684 | 30.0% | 18.2% | 39.4% | 39.4% |
| GS-15 | $126,384 | $164,301 | 30.0% | 17.6% | 41.3% | 41.3% |
Computed by Wagelist from the OPM 2026 General Schedule base table (5 U.S.C. 5332, administered under 5 CFR part 531), using step 1 as the minimum and step 10 as the maximum. The same computation on the 2025 base table returns the same percentages to within a tenth of a point in every row, so these are structural design ratios rather than an artifact of one year's raise.
Three things in that table are worth more than any rule of thumb. The first is the last two columns: from GS-4 upward, where every grade carries a spread of exactly 30.0 percent, the measured overlap and the 1 minus P over S shortcut agree to the decimal in twelve consecutive rows. The identity is not a modelling convenience, it is what a real published structure does. GS-2 and GS-3 are the only rows where the two columns disagree, and they disagree for the stated reason: grades 1 and 2 run non-standard spreads of 25.1 and 25.8 percent, so the equal-spread shortcut does not apply to them.
The second is the cliff at GS-12. Midpoint progression doubles from 9.9 percent to 19.9 percent in a single step while the spread stays pinned at 30 percent, and overlap collapses from 67.1 percent to 33.8 percent. Nothing about the dollars changed shape there. The structure simply decided that below GS-12 the grades are rungs a person walks up, and at GS-12 and above they are genuinely different jobs. Whatever you think of the federal ladder, that is a deliberate two-zone design, and it is visible only if you compute the overlap instead of reading the pay table.
The third is the level itself. The whole schedule sits between 33.8 and 67.1 percent overlap. Plenty of HR writing insists that healthy overlap is 20 to 25 percent, which would put the biggest published salary structure in the country outside the recommended band at every single grade. Either the rule of thumb is wrong or the federal government is, and the rule of thumb is the one with no source attached.
Read this next to your own data
The General Schedule is a useful yardstick, not a benchmark for your market. Federal grades are priced for the whole country and then adjusted by locality, so the base rates above sit below private pay in most metros for most jobs.
For private market rates by occupation and metro area, the same public source we build bands from is described on BLS salary data, and the federal night and weekend premium rules that sit on top of these rates are on shift differential pay.
Model a whole grade ladder and see every overlap at once
Checking one pair of grades tells you very little. Overlap problems show up as a pattern across the ladder: fine at the bottom and mushy at the top, or the reverse. Set your first midpoint, your range spread and your midpoint progression, and this builds the whole structure with the overlap for every adjacent pair.
Structure inputs
Overlap at every rung
Constant, because every grade shares a spread. Top of the ladder: .
| Grade | Minimum | Midpoint | Maximum | Overlap with grade below |
|---|---|---|---|---|
Ranges are built symmetrically around each midpoint, which is the standard construction and the one the shortcut in section 02 assumes. If you widen senior grades and keep entry grades narrow, overlap stops being constant and you need the pair calculator at the top.
What goes wrong at each end of the overlap scale
Too little overlap
Every raise turns into a title argument
With overlap near zero, a person at the top of their grade has nowhere to go. The manager who wants to keep them has exactly one move: promote them. So titles inflate, job descriptions drift away from the work, and the structure you built to control pay ends up driving the org chart instead.
It also makes external hiring expensive. If the next grade starts above where your best internal candidate sits, you are paying a premium to promote from inside and a bigger one to hire from outside.
Too much overlap
Promotion stops paying, and people notice
Past roughly 75 percent, two adjacent grades cover nearly the same money. A promotion moves someone from the middle of one grade to the bottom third of the next for a few percent, and the raise is smaller than the extra responsibility. That is the fastest route to pay compression, where new hires arrive at the same number as people with three years in the job.
It is also hard to explain. If a manager cannot say what the next grade is worth in dollars, the grade is not doing any work.
The check to run first
Compare overlap against your real promotion rate
Overlap only matters relative to how often people actually move. A company that promotes someone every four years needs enough runway inside a grade to cover four years of merit increases. Four years at 3.5 percent is about 15 percent of pay growth, which needs at least that much headroom above where people are typically placed.
Check where people actually sit with the salary range penetration calculator before you touch the structure.
Posting ranges
Overlap decides what your job ads look like
In states that require a pay range in the posting, heavy overlap means two openings at different levels advertise almost the same numbers, and candidates compare them. Thin overlap means the ranges are clean and distinct but each one is narrow, which leaves less room to negotiate.
The posting rules themselves are on job posting salary ranges and state by state on pay transparency laws.
Price the grades, then the overlap takes care of itself
Overlap is a consequence, not a starting point. The thing you actually need first is a defensible midpoint for each grade, priced against real market data for the job and the metro area rather than back-solved from whatever you are paying now. Once the midpoints are right, pick a spread, and the ladder and its overlap fall out of the arithmetic in section 02.
Wagelist builds those bands from public United States wage data for common office and tech roles, so the number behind each grade has a source you can show a manager, a candidate or a regulator. Build one on the right for a real role, then feed the midpoint into the structure modeller above.
- P25
- $0
- P50 ยท Median
- $0
- P75
- $0
Suggested posted range
Built from public U.S. BLS OES wage data (May 2024 release), adjusted for market, seniority and company stage by the multipliers published in our methodology.
Get bands for your whole team
Get startedSalary range overlap questions
How do you calculate salary range overlap?
Subtract the higher grade minimum from the lower grade maximum, then divide by the lower grade range width. With a $60,000 to $78,000 grade under a $66,000 to $85,800 grade, that is 78,000 minus 66,000, divided by 78,000 minus 60,000: 12,000 over 18,000, or 66.7 percent overlap.
What is the salary range overlap formula?
Overlap equals the lower grade maximum minus the higher grade minimum, divided by the lower grade maximum minus the lower grade minimum. When both grades use the same range spread there is a shortcut that needs no dollars at all: overlap equals 1 minus midpoint progression divided by range spread.
Should salary ranges overlap?
Yes, in almost every structure. Overlap is what lets a strong senior person in a lower grade out-earn a new hire in the grade above, which is usually the correct outcome. Zero overlap forces a promotion for every meaningful raise and makes every grade boundary a cliff. The federal General Schedule runs 34 to 67 percent overlap.
What is a good salary range overlap percentage?
Most private structures land between 25 and 60 percent measured against the lower grade. Broad bands with few grades sit at the low end because midpoints jump further. Narrow grades with many steps sit high, often past 60 percent. There is no universal number: it falls out of your spread and progression.
How much should pay grades overlap?
Pick range spread and midpoint progression first, and overlap is decided for you. Equal spreads make overlap 1 minus progression divided by spread. A 30 percent spread with 10 percent progression is exactly 66.7 percent overlap. If you want less overlap, widen progression or narrow the ranges, not both at once.
What if salary ranges overlap too much?
Overlap above roughly 70 percent means the grades barely differ in pay, so the structure stops explaining anything to managers or employees. The usual cause is midpoint progression under half the range spread. Either merge adjacent grades or raise progression until each promotion moves real money.
Can pay grades have zero overlap?
They can, and step systems for unionized or hourly work often do. Zero overlap happens when midpoint progression equals or exceeds range spread. The cost is that a top performer at the ceiling of their grade has nowhere to go without a promotion, so every raise becomes a title decision.
What is the difference between range overlap and range spread?
Range spread measures one grade: maximum minus minimum, divided by minimum. Range overlap measures two adjacent grades against each other: how much of the lower grade the next grade up also covers. Spread is a property of a band, overlap is a property of the ladder the bands sit on.
How do you calculate pay range overlap in Excel?
With the lower grade minimum in A2, its maximum in B2 and the higher grade minimum in C2, enter =(B2-C2)/(B2-A2) and format as a percentage. A negative result is a gap rather than an overlap. Copy the formula down so each row compares a grade with the one above it.
Does overlap cause pay compression?
High overlap makes compression easier to create, but it does not cause it on its own. Compression comes from hiring at market while internal pay moves at merit-budget speed. Heavy overlap simply means there is less distance between grades to absorb the gap before a new hire passes a tenured employee.
Keep going
-
Salary structure design
Grades, spreads and progression, and how the three fit together.
-
Salary midpoint calculator
Build the minimum, midpoint and maximum each grade needs first.
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Pay grades vs salary bands
Which of the two your company actually needs.
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Pay compression
What heavy overlap turns into when market rates move faster than merit budgets.