Average Salary

Fairly easy to most of you. The average is the sum of salaries divided by their count. For example, the average salary of
1500$, 2500$ and 5000$ is 1500 ! 2500 ! 5000 " #000$ divided by % e&uals to %000$. The average salary is a good
indicator in general but it does not tell the 'hole story. For example, suppose 'e 'ant find out the average salary of four
ban(ers 'ith the follo'ing salaries) 1500$, 1500$, 2500$ and 11500$. The average salary 'ill be $*000 but does it give you
a good idea of a ban(er+s salary, -fcourse not. .ll of the ban(ers earn less than $*000 except for one earning too high
above the rest causing the average to be high. /n this case the average is a poor indicator. 0eep in mind) the more data you
have the less li(ely you are to get a misleading average. .s a general rule it+s a good thing 'hen your salary is above the
average.
Median Salary
1edian salary is the middle value that splits the data into t'o halfs) a lo'er half and a higher half. /n our example above, the
median salary of $1500, $1500, 2500$ and 11500$ is 2000$. 2alf of the salaries are less than 2000$ and the other half are
greater. /n general, the median is a good indicator 'hen comparing salaries because you can easily tell 'hether you are on
the better or 'orse side. 3se the median to find out to 'hich half you belong) the better or 'orse half.
Salary Range
The range is nothing but the maximum and minimum values. /t is not really tell you much but it gives you a good idea of the
acceptable salary figures for a particular 4ob. /f the highest paid ban(er gets 2000$ and the lo'est gets 1500$ then your
salary should be some'here bet'een these t'o figures. /n general, it is a good thing if your salary is above the middle
value of the range.
Percentile
5robably the most difficult concept to grasp among all. /t can best be illustrated by an example) if 'e say that the 60
th
percentile of ban(ers is 2000$ it means that 60 percent of all ban(ers earn less than 2000$. The ramaining *0 percent of
ban(ers get more than that. /n the salary comparison report 'e 'ill sho' your percentile value. /f you get for example 708 it
means you are earning more than 708 of you colleages. -nly %08 are getting more than you. The higher your percentile
the better. .s a general rule, it is a good thing if your percentile value is more than 508.
So how do I compare my salary?
The diagrams belo' explain the 'hole story but read on. First loo( at the median and determine 'ehther your salary is
more or less than the median salary.
/f your salary is above the median then you are on the better half but loo( at the average. /f your salary is above the average
then you are in a very good situation. /f your salary is belo' the average, then you are still in a good situation but you may
be missing some real good paying 4obs in your field.
/f your salary is belo' the median then you are on the 'orse half but loo( again at the average. /f your salary is above the
average then this means that you are not very far from the better half. 1ost probably the people 'ho are earning better than
you are only getting a little bit more. /f your salary is belo' the average then you may 'ant to as( for a raise or consider
changing your 4ob.