How do companies set their salaries or pay rates for remote jobs?


Answered by: ByVirtualist career experts

Salaries for traditional in-office positions are typically determined through a comprehensive analysis that includes various factors, with one crucial factor being the compensation of similarly qualified and experienced professionals in the local area where the company operates.

However, when it comes to remote job salary ranges, location plays a significant role due to the significant variations in the cost of living across different regions, both within the United States and internationally. For instance, the salary of a web designer in Louisville, Kentucky, may not suffice to meet living expenses in Chicago, Illinois.

So, how are salaries for remote jobs established, considering that remote workers often operate from different locations far from the company’s physical office (or in the case of fully remote companies, where there is no office location)? Through our interviews with companies that employ remote workers, we have identified three primary methods used to determine remote worker salaries:

  1. Based on the location of the company’s main office or branch offices.
  2. Based on the location of the remote worker.
  3. Based on the national average for the specific job type.

To ensure you are well-prepared, it is recommended to utilize the three methods described above to derive three potential salary ranges for yourself. You can conduct salary research on platforms such as PayScale and, considering:

  • The location of the company’s office.
  • Your home location.
  • No specific location.

By examining the salary ranges for each job title using these three scenarios, you will have a comprehensive understanding of potential compensation, enabling you to be fully prepared for various salary determination methods employed by different companies. ByVirtualist aims to equip you with the necessary information to navigate the remote job market confidently.