Merit budget calculator
Enter your headcount, average salary, and merit budget percentage. See the pool and how it splits across performance ratings. Nothing is sent anywhere — it all runs in your browser.
Your cycle
$51,000,000
$1,785,000
Illustrative allocation
Performance-weighted split of the pool. HyperEquity also weighs position in range, tenure, and unexplained pay gaps — which is where the numbers below start to move.
| Rating | People | Avg. increase | Pool |
|---|---|---|---|
| Exceeds expectations | 120 | 5.9% | $602,169 |
| Meets expectations | 390 | 3.4% | $1,118,313 |
| Below expectations | 90 | 0.8% | $64,518 |
Run in a spreadsheet, this cycle is 45 manager workbooks to build, send, chase, collect, and reconcile against $1,785,000 — with no live budget counter and nothing comparing two people in the same job.
Reading The Result
What this does and does not tell you
The pool figure is exact — it is arithmetic. The allocation underneath it is illustrative. It weighs one variable, performance rating, and splits the pool accordingly.
A real merit cycle weighs several more. Position in range is usually the biggest: a top performer sitting at the bottom of their band needs a materially larger move than an identically rated peer already above midpoint, and treating them the same is how pay gaps open in the first place. Then there is time in role, proration for mid-year hires, different market movement per country, and the gaps between comparable employees that your own policy cannot explain.
Handle all of that at once, across every manager, staying exactly on budget, and you have described what HyperEquity does in ten seconds.
Questions
Merit budgets, answered
Multiply eligible payroll by your merit budget percentage. For 600 employees at an average base of $85,000, eligible payroll is $51,000,000 — a 3.5% merit budget gives a pool of $1,785,000. That pool is then allocated down through the organization and out to individuals.
In recent US cycles most organizations have planned somewhere in the 3% to 4% range, with higher figures in markets running hotter. Your own number should come from your market data and your finance team rather than a benchmark — the calculator works with whatever you set.
Higher performers should receive a larger share than their headcount share, or pay-for-performance is a slogan rather than a practice. The calculator uses a simple weighted split to illustrate the shape. In a real cycle, position in range matters as much as rating — a top performer already above midpoint needs less movement than an identical peer below it.
Because this is deliberately simplified. It weighs performance only. A real allocation also accounts for position in range, time in role, market movement per country, proration for mid-year hires, and unexplained pay gaps between comparable employees. That is the work HyperEquity does.
Yes, and there is no sign-up. Nothing you type here is sent anywhere — the whole calculation runs in your browser.
Going deeper? Read the complete guide to running a merit cycle.