Pay Gap Calculator - Salary Difference & Equity Analysis
Calculate the pay gap percentage, pay ratio, and absolute salary difference between two groups to support compensation equity analysis and HR reporting.
Enter the average salary for two groups — typically the higher-paid reference group and the comparison group — and the calculator computes all standard pay gap metrics instantly.
Pay Gap Calculator - Salary Difference & Equity Analysis
Calculate the pay gap percentage, pay ratio, and absolute salary difference between two groups to support compensation equity analysis and HR reporting.
About the pay gap calculator
The pay gap is a widely used metric for measuring compensation inequality between two groups, most commonly between men and women or between different demographic groups within an organisation. It is typically expressed as a percentage of the reference group's salary, making it easy to compare across industries and countries.
The unadjusted (or raw) pay gap formula is: Pay Gap (%) = (Salary A − Salary B) / Salary A × 100. If men earn an average of $75,000 and women earn an average of $60,000, the raw gender pay gap is (75,000 − 60,000) / 75,000 × 100 = 20%. This means women earn 80 cents for every dollar earned by men.
The pay ratio is the complement: Pay Ratio (%) = Salary B / Salary A × 100. In the same example, the pay ratio is 80%, meaning the comparison group earns 80% of what the reference group earns. Some organisations and regulators report the ratio instead of the gap, so both figures are provided by this calculator.
The absolute difference is simply Salary A − Salary B, expressed in the selected currency. This figure is most useful for understanding the real-world financial impact on individuals and helps contextualise the percentage gap against actual earnings.
It is important to distinguish between the unadjusted pay gap and the adjusted (controlled) pay gap. The unadjusted gap compares average salaries across all employees without controlling for job title, seniority, education, or experience. The adjusted gap attempts to isolate the effect of group membership by holding all other factors constant and is typically smaller. Both figures are meaningful: the unadjusted gap reflects structural inequality in representation and career progression, while the adjusted gap measures whether employees in identical roles are paid differently based on group membership.
This calculator computes the unadjusted pay gap. For a full equity analysis, organisations typically use regression-based methods that control for relevant variables. The results from this calculator are appropriate for high-level reporting, executive dashboards, public pay gap disclosures (as required by law in several jurisdictions including the UK, EU, and Australia), and initial screening before commissioning a detailed statistical analysis.
Pay gap calculator examples
Three scenarios illustrating different pay gap magnitudes and how the metrics relate to each other.
| Group A / Group B Salary | Pay Gap | Pay Ratio / Absolute Difference |
|---|---|---|
| $75,000 / $60,000 | 20.0% | Pay ratio = 80.0%. Group B earns $15,000 less per year — equivalent to 80 cents for every dollar earned by Group A. |
| $90,000 / $85,500 | 5.0% | Pay ratio = 95.0%. A small but non-trivial gap of $4,500 per year. At this level the gap is often within the range reported as statistically significant in pay equity audits. |
| $50,000 / $50,000 | 0.0% | Pay ratio = 100.0%. Equal pay — the ideal benchmark. Absolute difference is $0. |
| $120,000 / $72,000 | 40.0% | Pay ratio = 60.0%. A large gap of $48,000 per year. This magnitude is common when comparing very different demographic groups in sectors with high occupational segregation. |
How to use the pay gap calculator
- Enter the average salary for the Reference Group (typically the higher-paid group, e.g. men or the majority group) in the first field.
- Enter the average salary for the Comparison Group (e.g. women or a minority group) in the second field.
- Optionally change the Currency Symbol to match your reporting currency — this affects only the display of the absolute difference.
- Click Calculate. The results show the pay gap percentage, pay ratio, absolute difference, and the per-dollar-earned figure.
- Click Reset to clear the form and start a new calculation.
Pay gap calculator FAQ
What is the difference between the pay gap and the pay ratio?
The pay gap is the percentage by which the comparison group's salary falls short of the reference group's salary: (A − B) / A × 100. The pay ratio is the percentage of the reference salary that the comparison group earns: B / A × 100. They always sum to 100%, so a 20% pay gap implies a pay ratio of 80%. Regulators and companies often prefer different conventions, so both are displayed.
What is the unadjusted versus the adjusted pay gap?
The unadjusted gap compares raw average salaries without accounting for differences in job type, seniority, or experience. The adjusted (controlled) gap uses statistical regression to hold those factors constant, isolating the pure group-membership effect. Both matter: the unadjusted gap captures structural inequality in who holds which roles, while the adjusted gap reveals whether people in the same role are paid differently based on group membership.
Which countries require pay gap reporting?
As of 2024, mandatory pay gap reporting is required in the United Kingdom (organisations with 250+ employees), the European Union (under the Pay Transparency Directive), Australia (Workplace Gender Equality Act), Ireland, Switzerland, Iceland, and several Canadian provinces. The US does not currently mandate public disclosure but requires EEO-1 pay data reporting to the EEOC.
Is a 0% pay gap realistic?
A 0% unadjusted pay gap is rare in practice because occupational segregation — the tendency for different groups to be concentrated in different roles and industries — leads to different average salaries even when no individual is paid differently based on group membership. Complete pay equity usually requires both equal pay for equal work and equitable representation across all job levels.
How do I interpret the 'per dollar earned' figure?
The per-dollar-earned figure expresses how many cents the comparison group earns for every dollar earned by the reference group. For a 20% pay gap, the figure is 80 cents per dollar. This framing is common in policy discussions because it translates the percentage into a concrete financial comparison that is easy to communicate to non-technical audiences.
Can this calculator handle multiple groups?
This calculator compares two groups at a time. For multi-group analysis — for example, comparing several demographic groups simultaneously — run separate calculations for each pair using the reference group's salary as the common baseline. This approach produces pairwise gaps that can be assembled into a comparison table.