5 Steps to Calculate Your Internal Promotion Pay Raise Goal Using Available Pay Ranges + Visual Example

You’re incessantly checking your phone. Still no call. You applied for that promotion you’ve been jonesing for, you feel good about the interview, and now you’re anxiously awaiting the phone call.

If you’re anything like me, you took to the internet to seek help with negotiating your salary increase for your internal promotion and came up with… not much. All these articles are about negotiating your salary at a new job, but almost nothing about the nuances of internal promotion salary negotiations. I'll share some internal promotion salary negotiation tips for corporate workers.

Table of Contents

• Why Negotiation Matters

• Some Things to Keep in Mind

• Step 1: Gather your current salary, the pay range for your current job position, and the range for your potential new job

• Step 2: Calculate Your Current Job’s Salary Midpoint

• Step 3: Find Your Current Salary’s Relation to the Midpoint

• Step 4: Calculate Your New Job’s Salary Midpoint

• Step 5: Identify the Minimum Pay You Should Negotiate for Your Internal Salary

• Why This Works: Ensure You'll Be Fairly Paid

• Visual Example of Using Pay Range to Target Your Internal Promotion Salary Negotiation

Why Negotiation Matters

Salary negotiation is a critical skill that many employees overlook, particularly when being promoted from within. Promoted employees often miss out on fair compensation due assuming that their employer will automatically provide a raise that reflects their new responsibilities.

I am guilty of not negotiating my pay. I didn't negotiate my pay when interviewing for my first entry-level position at a corporate company, not did I negotiate my first several promotions.

Over time, I learned that I was making tens of thousands of dollars less than my teammates on my team. I was very lucky to have a boss that saw my low pay and advocated for my pay to increase to parity. I am fortunate for a good leader, but that was a stroke of luck to end up with a leader who would go to bat for me.

Don't be like me and have your pay fall behind because you didn't negotiate.

Wage Transparency Laws Means You Have More Tools for Gaining Fair Compensation

Many states now have wage transparency laws that require the job salary scale to be included on the job posting. Since many companies employ workers nationwide, it’s becoming increasingly common for companies to list the job’s salary range on the job posting. You can use that range to help determine how much you should be paid for your new internal promotion.

If you’re not sure where to start with your internal salary negotiation, here’s a way you can use known job salary scales to calculate the minimum salary you should negotiate for your internal promotion. I’ve included a visual example to help make it easy.

Some things to Keep in Mind

First, a couple things to keep in mind. The method I’m about to show you is a simple calculation that does not include things like bonuses, the value of benefits packages, or non-standard types of pay. This technique is uniquely useful when getting promoted internally, rather than when getting a new job at a new company. This method is loosely based on the compa-ratio method. I recommend using this approach as one piece of your greater salary negotiation research.

Step 1: Gather your current salary, the pay range for your current job position, and the range for your potential new job

In this example, you currently make $65,000 a year. Your current job’s pay range is $50,000 to $110,000. Your potential new promotion position has a range of $90,000 to $150,000.

Step 2: Calculate Your Current Job’s Salary Midpoint

Look at your current job’s pay range and add together the lowest number and the number. Then you’ll divide that by 2.

In this case, $50,000 + $110,000 = $160,000. Now we divide that by 2 to get $80,000. This is the salary midpoint for your current job. Next we'll compare your current salary in relation to the midpoint.

Step 3: Find Your Current Salary’s Relation to the Midpoint

Next you’ll take your current salary and divide it by the current job’s salary midpoint you calculated in step 2.

For this example, we type in the calculator: 65,000 ÷ 80,000. The result is .765.

Now you know how your salary compares to the midpoint for your job. In this example, you currently make 76.5% of the midpoint. For your next job, you want to at least make 76.5% of that job's midpoint.

Step 4: Calculate Your New Job’s Salary Midpoint

Just like step 2, you’ll add your potential new job range’s high and low point, then divide by 2.

In this scenario, we’ll add $90,000 + $150,000, which gives us $240,000. Then divide that by 2: $240,000 ÷ 2 = $140,000. This is the new job’s midpoint

Step 5: Identify the Minimum Pay You Should Negotiate for your Internal Salary

The very last step is take your current job’s salary relative to the midpoint (what we calculated in step 3) and multiply it by the new job’s pay midpoint (calculated in step 4).

For our example, that means calculating 0.765 x $140,000. That get us $107,100.

Now we know that $107,100 is the very minimum you should aim for when negotiating your internal promotion’s salary increase.

Why This Works: Ensure You'll Be Fairly Paid

Ideally your new internal promotion should have you sitting in at least the same spot as your current role. This method of targeting the minimum salary ensures that you are paid at least on par as your current position, relatively speaking.

Visual Example of Using Pay Range to Target Your Internal Promotion Salary Negotiation

Here is a visual illustration of the example we explored in this article. Take a look to see how you can use pay ranges to target the minimum amount you should negotiate for your internal job promotion salary.

Have you tried this method out yourself? How'd it go? Share your experiences below!