Maximum Annual Salary

Maximum Annual Salary - HR Metric - calculation

What (Definition)

Maximum Annual Salary is the actual maximum salary of current employees. This is based on the annual salary agreed with the employee and not the salary paid to employee so far.

Why (Benefits)

Maximum Salary is usually helpful to know within a specific salary grade or pay grade. Jobs are usually assigned a specific salary grade and each grade has a minimum and maximum salaries as guidelines. This actual maximum salary can be compared to the maximum salary set for the specific grade to ensure that the policy guidelines are followed.

How (Calculation?)

Formula: Max of Actual Annual Salaries of Employees

If we have a list of employees and their salaries, we can calculate the maximum.

Maximum Salary Calculation with an Example

Maximum Annual Salary

In this example, Hills has the maximum salary of $71,471

As mentioned earlier, the metric is useful when segmented by job grade. If the job grades are A, B, C and D, we can calculate the max salary for each grade.

Let’s look at this chart below.

Maximum Salary by Grade

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Related HR Metrics

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Now, it’s your turn.

Do you calculate maximum salary in your organization? What method do you use? Please share your thoughts. I look forward to learning from you.