Where does PayScale get salary data?
PayScale is the largest real-time online employee salary database in the world. Our data is composed of millions of PayScale Salary Surveys taken by curious individuals who answer questions such as job title, education, years of experience, shift worked and more in order to compare their salary and understand the market for their skills.
What PayScale data is used for AOL features?
For AOL features, PayScale usually reports the national median salary (often called the "typical salary") for a job title based on a specific range of years of experience. Unless mentioned in the article, the national median salaries reported do not take into account bonuses, overtime, unique employee qualifications, or specific geographic location.
How can I compare my own salary?
While the national median salary for a job is useful for general knowledge, it should not be used for determining how much an individual employee should be paid for a specific job in a specific location. To compare your salary based on your specific job title, location, education and experience, complete the PayScale Salary Survey.
Why do some people make more or less than the PayScale salary stated for a specific job on AOL?
High-earning individuals don't necessarily represent the typical or median salary for their specific job in the United States. Within any salary range for a job, there are always outliers and the people you know may be outliers.
For instance, if you know a self-employed plumber who makes $200,000 per year or a fabulous dog groomer who rakes in $60,000 per year as a small business owner, they may be exceptional rather than typical. Perhaps these individuals are very talented or have substantial training. They may be very savvy business people or live in areas where their chosen professions are highly compensated. They represent the potential salary – what someone on a specific career track might make given special factors – not the typical salary for a given job.
How is the median wage for a job calculated?
Say that a high school custodian wants to figure out how much people in janitorial professions are paid and better understand how his salary stacks up.
He asks 9 different people, all who have slightly different jobs (all custodial in nature), work for different kinds of companies (some work for the city, others are unionized and work for a large corporation, some work for small businesses and one owns his own business) and different levels of experience. Therefore, even though they are all technically in custodial jobs, there is a wide range of pay. The national median wage in this case is $12.56. This means that 50% of people with the job title "custodian" in the United States earn more than $12.56 and 50% of people earn less.
The typical Hourly Rate for a Custodian in United States is $10.58 to $15.00.
Calculating the Median Wage or Salary.
In this case, our custodian friend asked nine different custodians with different locations around the country, so we have a series of nine salary numbers. The median number is the salary that lands in the middle. In this case, if you make $12.56 as a custodian, 50% of people with similar work in the United States make more and 50% make less. The low end of the scale is $10.58 and the high end is $15.
Salary Data Points: $6, $10.58, $11, $11.75, $12.56, $13.25, $14.15, $15, $120
Median Wage: $12.56/hour
What about the guy who earns $120 an hour?
You might have noticed that the very high and very low salaries reported aren't expressed in this report. This is a statistical method called "clipping outliers." It is very possible that one custodian out of nine makes the exceptional wage of $120 per hour but according to our data this is not typical. It is also not typical for a custodian to make less than $10.58 per hour. The typical salary range is the range that applies to most people with a specific job in the United States.
Why does PayScale report median wage instead of average (mean) wage?
The reason that PayScale reports median wage instead of average (mean) wage is that outliers (such as one custodian who makes substantially less than the group or the guy who owns his own business and rakes in $120/hour) can throw the average off, giving people false information and expectations around typical compensation for a specific job.
Calculating the Average Wage or Salary
For instance, if our high school custodian wanted to determine the average wage for his job, he would add up the wages of all his custodian friends and divide by nine.
Salary Data Points: $6 + $10.58 + $11 + $11.75 + $12.56 + $13.25 + $14.15 + $15 + $120 = $214.29
Average (Mean) Wage: $214.29 / 9 = $23.81/hour
As you can see, the one guy who is making $120 an hour pushes up the average wage to almost twice what the true median wage is for a custodian job. Since most of the people in his profession are paid under $15 an hour, the average isn't a reflection of true typical wages for custodians. To avoid the false influence of outliers, we use the median salary calculation to represent the typical wage or salary for a job.