Minimum Annual Salary

Minimum Annual Salary - HR Metric - calculation

What (Definition)

Minimum Annual Salary is the actual minimum 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)

Minimum 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 minimum salary can be compared to the minimum salary set for the specific grade to ensure that the policy guidelines are followed.

How (Calculation?)

Formula: Min of Actual Annual Salaries of Employees

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

Minimum Salary Calculation with an Example

Minimum Annual Salary

In this example, Adams has the minimum salary of $20,589

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 minimum salary for each grade.

Let’s look at this chart below.

Minimum Salary by Grade

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Related HR Metrics

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Now, it’s your turn.

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