How to Calculate a Median Salary

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The median salary is the salary for which 50 percent of a company’s salaries are higher than and 50 percent of the company’s salaries are lower than. For example, if you have five workers who are paid $100, $200, $300, $400 and $500, the median salary is $300. Median salary is a useful metric in measuring compensation trends at your company, and it can be helpful in benchmarking your company’s compensation practices to the salaries paid by competing firms. Understanding trends in your company’s median salary will help you ensure that your firm is paying market compensation, which will help you attract the best workers.

Gather the appropriate payroll data from the human resources department. The information you get will likely be anonymous to protect employee privacy. You may want to sort the data according to job function, title or department, or you may simply be interested in the median salary for the entire company.

Download the data into Microsoft Excel. Depending on the format of the data, you should be able to use Excel’s data import function to easily download the data into Excel. Click on the "Data" tab in Excel, then "Existing Connections." Choose "Select Data Source" in the drop-down menu, and then click on the file in which the data is stored. Click "Finish" and the data should be imported into a single column in Excel.

Rank the data from highest to lowest in Excel. Highlight the column that contains the data, and click the "Sort" button in the Data tab. This command will order the data from highest to lowest.

Type the command: =MEDIAN( in a blank cell. Select the column of data, close the parenthesis, and press enter. The number that is displayed will be the median salary from the column of data.

Tips & Warnings

  • You can use the median salary data to compare your compensation practices to the compensation practices of similar firms. Services such as PayScale publish reports with median salary information for job functions and geographic areas.
  • Do not select blank cells when selecting the salary data in the median formula. Excel will interpret blank salaries as zero, which will give you an inaccurate number for the median salary.

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