It’s been over 2 years since we first shared our transparent salary formula; we’ve been truly blown away by the response we’ve seen.

It’s been incredible to see how many companies have adopted our formula or a similar open formula, and it’s a privilege to be a small part of the larger conversation around pay transparency and equality.

It also kicked off a long list of other things that we wanted to make public. Here’s a roundup of things we’ve made transparent since then:

You can get an overview of everything here.

Since we first launched our formula, a lot of things have evolved and changed at Buffer. We thought it was time for our salary formula to evolve, too.

This was a really fun process for us—we worked on this with the whole Buffer team for about 2-3 months (more on our detailed process on this further below!) and this is the result.

Today we’re excited to share a new (and, we believe, improved) version of our salary formula, along with a brand-new web app that anyone can use to find out what you would make if you were part of the team at Buffer.

Buffer’s new salary formula

Our new formula looks like this:

Buffer Salary Formula

Here’s a quick breakdown of each component:

Role: (overall base + location base + cost of living)* role value 

The first, and biggest component for anyone’s salary is the role component. On the whole it consists of the following 4 factors:

  • Overall base: For 35% of the base, we use standard U.S. data from both Payscale and Glassdoor to determine overall base.
  • Location base: For the other 65% of the base, we factor in each location’s cost of living using Numbeo together with data from Payscale and Glassdoor, which we then use to have a base salary for that particular location (say New York or Cape Town).
  • Cost of living correction: A $0-$8,000 addition to some salaries based on cost of living. We explain all about this one below in “The Good Life Curve” section – it’s an additional fixed value that can range from $0-$8,000/year.
  • Role value: A multiplier to adjust the overall salary. We don’t agree with the market salary data all the time (for customer service roles, for example) and so we create our own “role value adjustment” based off what we feel is fair. This can be an overall multiplier of 1.1x for example, or it can decrease for roles that aren’t exactly as described by Payscale and Glassdoor.

Experience: After we have your role base (above), we then apply the experience multiplier. There are 4 tiers as follows, which we determine through discussions with each team member:

  • Beginner: 1x
  • Intermediate: 1.1x
  • Advanced: 1.2x
  • Master: 1.3x

Dependents: For every person that depends on your income (kids, husbands, wives, significant others, grandparents, aunts and uncles, etc.) we add an extra $3,000 per year in salary.

Update January 2016: We now have a different method for supporting dependents that is not part of the salary formula; you can learn all about it here.

LoyaltyFor every year a teammate is with us at Buffer, they’ll receive a general pay raise of 5%. This is applied on top of all of the above.

Choice: This is an option we give Buffer team members to either get extra salary or extra stock options in their compensation package. Right now, you can either add an extra $10,000 to your salary or skip the extra salary and get roughly 30% more stock options.

Here’s an example, putting all this together:

For an advanced engineer, living in Cape Town, who chooses more equity and has 2 kids and a husband depending on her income, this would be the result:

  • $60,662 x 1.20 + $9,000 + $0 = $81,794

A full list of all our salaries

Calculated with the new formula, here are the salaries of every team member at Buffer right now:

Team MemberRoleStart DateLocationSalary
JoelCEO2010-08-01New York, NY, USA$218,000
LeoCOO2011-01-03New York, NY, USA$185,000
AndyiOS Developer2012-06-01San Francisco, CA, USA$168,550
CarolynCHO2012-09-01New York, NY, USA$140,932
SunilCTO2012-09-18Boston, MA, USA$182,089
ÅsaCustomer Success Lead2013-02-18New York, NY, USA$121,090
ColinBackend/Frontend Developer2013-02-22Cambridge, UK$122,670
NielBackend/Frontend Developer2013-08-15Cape Town, SA$101,141
MaryHappiness Hero2013-11-11San Francisco, CA, USA$92,108
AdamHappiness Hero2013-11-13Detroit, MI, USA$91,389
DanielHappiness Hero2014-01-28San Francisco, CA, USA$80,974
CourtneyContent Crafter2014-02-03Nashville, TN, USA$89,582
StevenSystems Engineer2014-02-03Taipei, Taiwan$98,175
DanBackend/Frontend Developer2014-02-24New York, NY, USA$139,463
KevanContent Crafter2014-03-06Boise, ID, USA$95,631
PatrikCustomer Researcher2014-03-12Knoxville, TN, USA$98,112
DaveHappiness Hero2014-03-20London, UK$77,913
RodolpheOperations Champion2014-04-07Paris, France$118,331
NicoleCommunity Champion2014-04-14Portland, OR, USA$88,861
OctaHappiness Hero2014-04-28Miami, FL, USA$70,621
MichaelBackend/Frontend Developer2014-05-04Santa Cruz, CA, USA$151,078
TomAndroid Developer2014-06-03Toronto, Canada$102,842
MikeBackend/Frontend Developer2014-07-14Barcelona, Spain$96,926
JoséBackend/Frontend Developer2014-12-01Madrid, Spain$86,549
Tom DCustomer Researcher2014-12-15Cambridge, UK$81,415
EricSystems Engineer2015-01-06Beijing, China$76,692
PhilBackend/Frontend Developer2015-02-09New York, NY, USA$128,740
MaximeData Analyst2015-02-09Montpellier, France$94,291
Dave OProduct Designer2015-03-03Southowram, UK$103,833
JulianData Analyst2015-03-16New York, NY, USA$95,135
JimProduct Creator2015-04-16Nashville, TN, USA$134,215
DannyHappiness Hero2015-05-05London, UK$78,269
KatBackend/Frontend Developer2015-05-11Bristol, UK$89,549
PioulBackend/Frontend Developer2015-07-09Grenoble, France$95,215
Marc AnthonyProduct Creator2015-07-13Houston, TX, USA$119,548
SteveProduct Designer2015-07-27Timperley, UK$94,177
IvanaBackend/Frontend Developer2015-08-10Zadar, Croatia$92,116
SandrineContent Crafter2015-08-10Paris, France$81,780
KellyHappiness Hero2015-08-17Philadelphia, PA, USA$75,934
RossHappiness Hero2015-08-31Louisville, KY, USA$77,397
AlexBackend/Frontend Developer2015-09-01Los Angeles, CA, USA$111,696
Marcus WiOS Developer2015-09-02Padova, Italy$95,924
LorenzProduct Designer2015-09-08Rotterdam, Netherlands$90,324
RoyCustomer Researcher2015-09-10Saint Catharines, Canada$103,133
AlfredCommunity Champion2015-09-14Singapore$59,112
JordaniOS Developer2015-09-23Ozark, MO, USA$110,636
KyleProduct Creator2015-09-28Portland, OR, USA$116,243
AmyHappiness Hero2015-10-01San Francisco, CA, USA$77,118
JamesProduct Designer2015-10-05Berlin, Germany$95,538
AshContent Crafter2015-10-05Bury St Edmunds, UK$80,518
MattData Analyst2015-10-12Boulder, CO, USA$95,185
Mike ECustomer Researcher2015-10-14Sydney, Australia$82,992
HumbertoiOS Developer2015-10-14Asuncion, Paraguay$76,160
ArielleCommunity Champion2015-10-26Philadelphia, PA, USA$67,418
DebCulture Scout2015-10-27London, UK$86,423
KarimFinance Planner2015-11-01Växjo, Sweden$106,628
Marcus SMarketing Specialist2015-11-03Nashville, TN, USA$72,124
ToddHappiness Hero2015-11-05Louisville, KY, USA$64,397
BobHappiness Hero2015-11-05Medford, OR, USA$67,099
BorisBackend/Frontend Developer2015-11-09Montpellier, France$91,186
JulietHappiness Hero2015-11-09London, UK$71,203
FedericoBackend/Frontend Developer2015-11-09Milan, Italy$89,308
KieranBackend/Frontend Developer2015-11-16Sydney, Australia$95,287
HannahHappiness Hero2016-01-04Brighton, UK$66,002
DarcyTwitter Hero2015-11-17Fort Collins, CO$70,193

Check out our working salaries spreadsheet to get more information about how each salary is derived.

Introducing “The Good Life Curve”

This is one of the things we’re the most excited about for this salary iteration, and it has created some of the biggest changes of this formula.

Here was the problem: Our previous formula took into account the cost of living in a city, but not the market rate. For example, San Francisco and London were both considered at the same level previously since they have a similar cost of living, but have very different job markets.

When we first started doing this, we noticed that relying purely on market data would create a huge salary disparity. For example, there would be a $90,000 wage gap from Cape Town to San Francisco. We didn’t want that big of a gap for a number of reasons.

To mitigate this, we created a formula that ‘corrects’ this. We call this the “Good Life Curve.”

The new formula now includes an elastic part that adjusts to the cost of living and market influence of salaries for different roles.

good life curve

These are some of the key reasons that triggered us to come up with The Good Life Curve:

  • Buffer is not a San Francisco company, neither is it a Cape Town company—instead, it is a distributed company that operates in both places and many, many others as well. So we don’t want to blindly adjust to market rates and instead create our own rates that include this “remote” aspect in some way.
  • We believe that everyone should be able to live a good life—and we don’t want to exploit people living in places where wages are generally lower. We’re not an outsourcing company. Therefore, we decided to create a significant lift in salaries for those that live in places that are generally much lower paid compared to the average.
  • We don’t want to have such a stark wage gap between team members in general. Even though a certain gap is inevitable and good, if someone in the same role, with similar experience, is making $100k less, that feels unfair in the grand scheme of things.
  • The value that someone in San Francisco creates for Buffer is not different compared to the value a teammate in Cape Town creates. The only difference is that someone in Cape Town might have higher purchasing power, which should be the only driver of salary difference between the two.

We hope that the Good Life Curve offers a happy life to every teammate!

The Transparent Buffer Salary Calculator: Try it for yourself!

calculator launch

With weighting, multipliers and now The Good Life Curve, all of the various elements of the salary formula can get a bit tricky to explain as we grow the team quickly.

try the calculator

So we created The Transparent Buffer Salary Calculator. This means that now anyone can see what they might make at Buffer by plugging in their own data for location, experience and so forth.

For instance, an advanced-level developer living in San Francisco might enter this into the salary calculator:

Screenshot 2015-11-20 15.42.22

We break out for you each individual component so it’s simpler to understand how every element of the formula works together to create the overall salary.

Even though our formula has become more comprehensive, we hope that the calculator will make getting results easy. We were so blown away by how many startups have adopted our salary formula, and we want to keep making it simple for anyone to make use of our latest data.

On top of that, we’re of course excited to make great use of the calculator internally as we bring new people on board and give them fair and accurate salaries they can easily understand.

What isn’t in this iteration of our formula (and what’s next)

As we grow and evolve, our salary formula naturally needs to become a lot more comprehensive; and we feel it has turned into something that’s pretty solid now.

However, there are quite a few elements that are not included in this formula:

  • Experience: We’re using a very primitive approach to the experience component right now. It scales only across four bands: Beginner, Intermediate, Advanced, and Master. And it’s not a very accurate process in how we arrive there. More or less, we make a call and ask people how they feel about it. That’s not great, and we’re keen to improve this. It feels really important to measure people’s experience more accurately, and indicate how people can progress and be compensated for that progress. This is #1 on our list.
  • Taxes: We’re a distributed team, and taxes vary greatly by country. Even though the top-line salary might be easy to compare, the take-home pay might be quite different. We know, for example, that Buffer team members in France pay a lot of extra taxes that others don’t. This would be another great one to improve on.
  • Nomading: Another element of being a distributed team is that people are free to move around as much as they want. That’s usually a heavier burden in terms of costs, and we’re generally keen to support people in finding the place where they feel happiest and want to live. It’s something that isn’t accounted for either in the current formula and something we’re keen to dive in deeper on.
  • Exchange rate changes: Especially with the recent Euro/USD change, a lot of teammates’ salaries in Europe have gone up a lot. However if the opposite was the case, this might be more of a challenge.
  • Salary vs equity choice: When you join Buffer full-time, you decide whether you want more salary or more equity in your compensation package. Right now, you can get either $10,000 in extra salary or you can get 30% more stock options. That’s an option that has become a bit outdated as Buffer’s overall valuation has gone up and it’s no longer that attractive to get extra equity. This is another key iteration we’ve already started to work on.

Thanks for the amazing input, and let us know more thoughts!

It’s amazing to come across so many people who have been inspired by the original formula and implemented it for their own company.

For anyone looking to take a job at a startup, or anyone working on salaries at a startup, we hope this new formula and calculator might cut down the time you spend on thinking about salaries by many hours.

And even though we’ve thought about this formula for many months, it’s far from perfect. It’s going to have a ton of flaws and mistakes, and it’s exciting to share it with you to get feedback and insights we can use for the next version.

For a deeper dive into some of the philosophy and tactics involved in this version of our salary formula, we sat down for a chat with Courtney about the thoughts and process involved in creating it. You can watch the whole chat here:

There are many reasons why we believe salary transparency is such a powerful force, and we’re humbled and excited to keep iterating in this area, and keep starting conversations that can have an impact on the industry.

Hit us up in the comments below, we’d love to hear your thoughts and discuss.

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Written by Joel and Leo, Buffer Co-founders

Joel Gascoigne and Leo Widrich are the co-founders of Buffer.

  • cv harquail

    Leo and Joel- Thanks for this additional investment in transparency!

    Could you say a little bit more about the “family” category, and why you decided to include this in the salary calculations? What was your rationale for including # of dependents, and did you consider the paid-work status of other adults in the family?

    I’m intrigued because just about every other salary calculation strategy excludes family status, so yours is novel in that regard.

    And, once upon a time in the US, white men who were married were usually paid “a family wage” with the assumption of a non-wage earning spouse and children to support financially (though men of color, and women, in the same jobs, were not paid this ‘family wage’.) Theres some historical baggage around the practice of considering family status, that I’m sure isn’t part of your approach.

    • Heya CV, so great to see you here! Well, I’m not quite Leo or Joel but I hope you won’t mind me weighing in here; I’d love to dig into this a bit since inclusivity is an area I’m working a lot on at Buffer. :)

      I believe Leo is set to write an entirely separate post about the family component, so I’d be happy to make sure to send that your way when it publishes. Meanwhile, I’ll share a few thoughts I have.

      I think the family component was likely an outgrowth of our experiments in self-management and self-managed salaries. :) It gave us the opportunity to think about some new elements of compensation, like a teammate’s specific journey with Buffer and what their life outside work was like—for example, do they have children, parents or other loved ones who depend on their salary?

      In the end, self-managed salaries didn’t feel very transparent, but we did want to continue considering that family element as part of our philosophy of bringing your “whole self” to work. Each teammate chooses his/her own number of dependents on their own (with very few questions asked, as far as I have experienced).

      It’s interesting to hear about the “historical baggage” here–you’re right; that’s not part of our approach! :) I think we can think more on how to differentiate this path from those of the past; really appreciate you bringing this important point up! (And I’m keen to hear any suggestions you might have!)

    • LeoWid

      Hey CV, great to see you! This is a very European inspired element where governments pay between $2000-3000/year/kid and we wanted to do something similar. On the whole, we feel that kids are a big extra burden from a monetary perspective and we wanted to be there to support team members. Of course, it’s also a choice and we wanted to stand up for an opinion that we feel we want to support families in raising kids for example. Let me know if you have any thoughts on that! :)

  • Wasswa Samuel

    Cool stuff. I wonder how the formula would account for someone from the Rest of Africa. Would you consider consider Cape Town to be the base because the cost of living can vary significantly in other countries particularly because our currencies tend to be much weaker compared to the Dollar.

    • LeoWid

      Hey Wasswa, that’s a great question, I don’t think Cape Town would be the base for the rest of Africa and we’d look at every African country and city on a case by case basis. It just so happened that Cape Town/South Africa is the only city/country in Africa where we have Buffer team members right now. :)

  • Parker Agee

    I’m curious to know if any employees took a pay-cut with the update to the formula? If so, are you worried that the update affected morale in those employees? Love the calculator! It’s very compelling as a Front End Developer.

    • LeoWid

      hey Parker, yes, there were a number of people (I think around 10 or so) that did take a pay cut with the latest formula update. We tried our best here to consider a number of options. The way we tried to approach this is that we were happy with whatever the right outcome would be, including grandfathering as one of the key options. We made sure to have multiple conversations with the people where the formula resulted in a lower salary and through those conversations found that those people were able to get behind the value of the whole team having salary based on the actual formula.

      • Parker Agee

        Awesome. Thanks, Leo!

  • Krista Wiltbank

    I love that your engineer example is a woman. I know Courtney wrote a blog post addressing subtle biases, and this looks like a great instance of you tackling that head on.

    Your transparency is fascinating. What a great opportunity to peek into the culture of a company from the outside! When the transparency decision was made, if at any time it crossed anyone’s mind that it would help with attracting talent to the company… I’d say that turned out to be a successful idea. I wonder if you’ve ever noted, through conversations, how much your transparency (and the required reading to apply for Buffer positions) has opened people’s eyes to the sheer possibility of what working can be, as far as bringing your whole, authentic self to work.

    Watching with interest as Buffer continues on its path.

    • Excellent eye, Krista! ;) Thanks so much for taking the time to share such thoughtful and kind words; we all really appreciate it!

  • David Wolford

    Love the new salary formula and calculator! The addition of the Good Life Curve seemed to be a huge improvement on the old formula, especially for those living in lower wage areas. How do you currently deal with nomads? Do you change their salary location calculation each time someone moves?

    • Hey David! Yup, that’s what we’ve generally done in the past! I think we might be working on a more deliberate method to help out nomads in their traveling, which is something we’re super encouraged to do at Buffer!

      • David Wolford

        That’s really neat, it’s exciting to see a company that’s encouraging and supporting travel and adventure in their employees. Can’t wait to see how this part of the formula evolves!

  • Mia Moore

    I’ve always loved your take on transparency, especially as it applies to salaries! This was an excellent read. Some great updates to the formula, too. I’m excited to follow along as you improve and reiterate the formula in the future.

    I did the salary calculator (super cool feature!) and I’d say it hit the nail on the head! I recently applied to the Content Crafter role, and with my current experience, location, etc., I’d expect to make exactly what the calculator gave me (around $65K, for those who are curious). It’s great to have the calculator to see that the formula works.

    • Very cool to hear that it feels accurate for you, Mia! Thanks for giving the calculator a try!

  • Vicky

    Hey, I’m curious if you guys have set working hours – do you all have to be online at the same time? Do you have to work the same number of hours (i.e. typical North American 9-5) or is it flexible?

  • Guy Cohen

    Hi guys – really really interesting article for all new (and existing business owners). We are an executive search & recruitment firm looking to implement a new approach, involving allowing employees to travel and work across the world – so it may be interesting to know your methods are influencing companies outside of the tech field!

    Could you clarify some further details on the “Good Life Curve”? – I’m confused as to how it actually works and how it is calculated. Thanks for your advice and guidance.

    • Hey, Guy; sure thing! Let’s see if this gets you what you need. :)

      Salaries follow an approach of being 35% based on role-specific salary data (we use national averages for the U.S. here), and 65% based on the location (we use specific salary data for the city you live in here). This has a natural conclusion where markets with lower salaries generally benefit a lot from that 35% US national average and get a boost. Conversely, higher market places still pull up the number, due to their 65% location based leverage.

      On top of this, since this didn’t quite render salaries fairly yet (in our opinion), we created another layer, called the “Cost of living correction.” This assigns an additional fixed dollar value from $0 to $8,000 per year, on top of salaries, for places with a low cost of living that otherwise wold result in a very low salary. One example: Asuncion, Paraguay, where Humberto lives, gets the full $8,000 living correction boost. Whereas New York or San Francisco, naturally gets a $0 living correction boost.

      The result of all of this is that for lower cost-of-living locations, we very significantly increase salaries (as much as 200-300% the market average).

      For higher cost of living locations, we still make sure we are paying above market, just not by as much—it’s generally above the 75th percentile of median salaries for that location.

      • Guy Cohen

        Thanks Courtney!

  • $imply $peechless *_*

  • Please open source your calculators and tools

    • Great idea, Andre! I agree; that would be a lot of fun! Will see what we can do. :)

  • Terlihat & Ditemukan

    Good Life Curve,
    100% Remote.

    *Fall In Love w/ Buffer

  • Sylvia

    You guys are setting the bar high! It’s clear you care about your team, and want to make sure each person is happy and healthy. So much respect for you two co-founders as well as your whole team for being able to support one another and be open about your salaries (even those who may have taken a pay cut).

    • Hi Sylvia! Thanks so much for the kind and thoughtful words! I feel very well taken care of by Buffer’s founders. :)

  • Hi guys,

    Thanks for the wonderful sharing! Ever since Buffer started their with their culture of transparency and openness, I’ve been fascinated and a huge fan! Much respect to all those who’ve taken a pay cut too.

    A few quick questions:
    On the current open position job descriptions (for example here: https://buffer.com/journey/content-crafter), what does the “Salary” refer to? Is this the expected salary for a New York/San Francisco based position? With the new tool, I’ve noticed the difference between countries is larger than I previously thought. (rather naively, I thought the previous minimum salary was 65K, regardless of location).

    I’ve also noticed that everyone currently with Buffer is at least an “Intermediate”. Which I think is a testament that you attract the best and brightest. As you rapidly expand, are there plans to hire more entry-level positions?

    Thanks again, and I think with each evolution of the salary model — you’re only going to attract more and more great people!

    • Hi Aaron, these are awesome questions, thank you so much for taking the time to ask them! I think on our open roles page we tend to offer a pretty wide range in the salary area to account for any number of possibilities. You’re right; we tend to put the low end around $65K which may not always be the case anymore. Feels like a great one to update and be more accurate on! On the experience level side, yes, we seem to be mostly intermediate and advanced; which perhaps could use some work. We’re always open to entry-level, alternative background and self-taught candidates! I feel like we could probably do more to showcase this. :)

      • Hi Courtney,

        Thanks for your reply and kind words. Buffer sounds like an amazing place to work. You’ll definitely be receiving an application from me in the near future :)

  • Borkur Gudjonsson

    Is there any location in the salary calculator that (closely) matches Reykjavik, Iceland?

  • Another great post from the team, congratulations! Would you consider doing a follow up post to share the impact this tool has on recruitment? Or maybe even a note in a future company update?

  • vivalapa

    Congratulations. This openess is very refreshing. It’s not usual to share this type of salary information for all levels of employee (in the UK), and it should be.

    And the additional payment for dependants part of the formula was particularly interesting. Logically this this would an encouragement to have more kids – but then women would be disadvantaged after their child bearing age. And their partners, too. Similarly the older an employee is, the less likely they are to have surviving parents, grandparents, aunts, uncles. Right?

    Curiosity about how this would affect Buffer employees took me over to the Buffer Diversity Dashboard and unless I’m reading it wrong, there isn’t anyone who works at Buffer who is aged over 44.

    Surely this can’t be so?

    • Hey there, thanks so much for your thoughtful comments here! I really want to reflect on the “encouragement” factor that you’ve pointed to here; that feels important to be aware of both in terms of what we intended and how it is perceived. And I think you’re right; I don’t believe there is anyone in that age bracket at Buffer at the moment. That’s something we’d like to improve upon!

  • Lauren L.

    Do you guys have a list of job descriptions somewhere? Your calculator looks great, but is hard to use since a lot of your titles are proprietary. Thanks!

  • I love, love, love, love, love this calculator. Did I mention that I LOVE the calculator?

    I just have one question – what is a Diversity Guardian? I don’t see any roles open for this and I don’t think anyone currently holds that role (unless they’re in bootcamp). A little insight into the Diversity Guardian role would be greatly appreciated.

    • Great question! Diversity Guardian is a role I’m filling for about 20% of my time right now and hope to grow to a full-time role as our team grows. I’m kind of making it up as I go along (and as you’ve seen with all the great help you’ve provided me) but it generally focuses on building diversity and inclusivity in our team and our culture. Does that help at all?

      • Courtney, it definitely helps. Thanks.

  • ellatran91

    As Buffer is location independent, it seems to encourage employees to be a digital nomad and travel. How would you take that into consideration with the location in the salary formula?
    Thanks for answering :)

    • Hey Ella! Great one – we’re still working on crafting a better experience for those who are nomads just now, it’s interesting to strike a balance of current location (costs you endure during travels), basecamp (costs from back home, such as rent and taxes) – and adding that nomads will often spend more than locals in the same spot, due to short term travels :) Excited to continue tweaking the formula!

  • michaelbrumen

    Great article. My only question is after you add in taxes & benefits, the current headcount cost for Buffer leaves a little more than $100k in operating income before you consider any other operating cost of the business (tech, overhead, rent, etc). I do love the transparency but doesn’t the business have a fiduciary responsibility to the employees (equity) and investors to be more responsible?

    • Thanks for asking this really important one, Michael! I can’t speak for Joel or Leo but I will make sure they see this; I’m sure they’d want to share some of the philosophy behind these decisions!

  • Itamar Goldminz

    Buffer team,

    What a thought-proving post! You continue to push the boundaries on this topic and provide great thought leadership along the way.
    I was hoping you’d be willing to shed a bit more light on two other compensation components:
    1. Equity grants and refreshes – it’s clear from the post that you use them. Is the approach as formulaic as the one you use for salary? What are the key drivers?
    2. Incentive-based pay (bonuses and commissions in the form of cash or equity) – is it part of your total comp scheme? why/why not?

  • As someone who previously lived in SF and moved to a cheaper area to work remotely – I wouldn’t work for a company that factored my cost of living into the equation.

    I’ve deliberately lowered my cost of living, but still make SF rates while working remotely. The difference in the cost of living goes into my savings.

    Buffer clearly saw this weakness in the formula when they added the ‘good life curve’. I would go all the way and take location out of the formula entirely. This formula still favors those living in more expensive areas.

    • Really interesting thoughts here, Andrew; thank you so much for taking the time to share them!

    • I think transparency is great. It promotes a healthy culture. But the one problem I have with this formula is exactly that Andrew is voicing above. That it sucks for those working remotely from other countries to see what they “lose” because of their location. Take an ios developer In Egypt vs ios developer in SF. The difference is staggering. I don’t really have an answer for this. But it’s something I keep thinking about for our company as well. If anyone has a better solution to this problem do ping me!

    • River Wolford

      That’s the thing though, if you live in a more expensive area, your location shouldn’t punish your salary. Most companies take cost of living into account, it’s why minimum wage exists, they just don’t factor it in the way Buffer does.

      • Cost of living makes sense when the company requires employees to live near a particular location. It also makes sense in the context of a minimum wage. We are talking about skilled labor here.

        I’m actually advocating for equal salary regardless of location. You’re referring to EQUAL salary as a ‘punishment’. That sounds a bit self-entitled to me.

        • River Wolford

          It’s only a punishment in relation to location. If you are getting paid $10 for the same thing someone else is also getting paid $10, that is considered equal. However, if your rent is $7 and the other guy’s rent is $2, you have much less money to work with than the other guy. So, relatively speaking, he is making $5 more than you for the same task because he has greater purchasing power than you do because his cost of living is lower.

          • It sounds like we think of location in different ways.

            @riverwolford:disqus – you seem to think of location as fixed – an almost intrinsic attribute of a person that cannot be changed. You say the person paying $7 in rent has ‘less money to work with’, but that’s not true. Both people in your scenario have $10 to work with. The person paying $7 in rent chooses to spend $7 on rent instead of moving somewhere cheaper.

            For skilled, remote labor, I believe that rent is an expense no different from food, gas, health care, child care, education, or anything else.

            If I move from an area where rent is $2000/month to an area where rent is $1000/month, I fully expect to pocket the difference. My employer would be getting the same expertise and the same value – why should they pay less?

            Personally, I work freelance and I charge a fixed rate. My clients often don’t know where I am. It doesn’t matter to them.

          • River Wolford

            I completely agree, a person can change where they live, however, for a lot of people, it isn’t practical to do so. Either they live close to family, so they don’t want to move away, or their kids are in school and it wouldn’t be fair to move away from their friends, or they own their house and don’t want to deal with renting it out or selling it, etc. Moving isn’t always an easy thing to do. Sure, it’s possible, but it isn’t always practical. That being said, I don’t think Buffer pays you less if you move to an area with low cost of living, I’m not sure, but looking at their listed salary page, it seems that even the lowest paid employees’ get paid rather well.
            Additionally, rent isn’t the only thing to take into consideration when looking at location as a factor in wage. All the things you mentioned fluctuate in price based on location. Gas prices change per store location, so around any given city, prices can be all over the place. Food tends to be a bit more regular, but that fluctuates depending on what is imported and what is locally produced. For instance, produce in California tends to be a lot cheaper than in New York, or a colder climate like that because most produce in California comes from California. Insurance differs based on location as well, as it takes crime rates, accident frequency, median age, and other things into consideration. All of that factors into cost of living for any given area. When you compare cost of living to your gross annual income you arrive at your purchasing power. The idea, as an employer like Buffer who takes cost of living into consideration, is to try to equalize buying power rather than equalizing actual income. Like a lot of things, both methods have their pros and cons, but personally, I like the Buffer method.

  • Roy

    Great job! One question about experience. What are qualifications for the experience-level. How does an employee know what to improve to grow to “advanced” level?

  • mattg

    Just a heads up, you have a merge conflict in your calculator code, so it doesn’t work now.

  • This calculator is genius! Thank you guys again for being so transparent about something that many companies often hold close to the chest.

  • pegasus194

    Why is it that you are paying people on the basis of what they “require” to live well in a particular place or country ?

    Shouldn’t you try to objectively measure the “value” they bring to Buffer and pay them on the basis of that. I mean experience whilst it may be highly correlated to a person’s competence, it isn’t a reliable indicator of the person’s value to the company.

    For example, let’s say your CTO works out of India. Now the cost of living in India would be so low that it would put the salary of the CTO lower than that of the a new joinee who is working in the US.

    Anyone who works at any company should be paid what they are worth to the company and how much of a positive impact they are able to make on the bottom line. It would be nice if you could find metrics that effectively measure value to company. Then measure performance relative to everyone else in the company. And finally allocate a specific (%) to different employees or classes of employees on the basis of the value they can add to the company.

    I’m not saying that looking out for your employees is a bad thing. There isn’t any logic in paying people based on where they are living. Companies should compensate people for what they’re worth.

    I mean if someone were to have kids or parents as dependents, I don’t quite see why it would be Buffer’s responsibility to consider or factor it in for determining salary.

    Also there doesn’t seem to be any incentive based bonus system which is a big downer :(

    But hey if the investors & major equity holders in the company are happy, whom am I to tell you how to run your business ;p It’s always nice to read your blog posts though.

  • Yassine Alouini

    I really like the new formula and the detailed explanation. A great article and an enjoyable read. Keep up the good work!

  • Very interesting and inspiring! Thanks for sharing!

    A couple of thoughts that crossed my mind about this:

    – If Buffer is truly a fully distributed team, and the contribution of different team members is independent of their geographical location, then why would their compensation depend on their location? I don’t think that the “cost of living” argument holds here, and “the good life curve” feels like a patch. What I would expect is that everybody should get paid according to the “San Fransisco” tier, and if they choose to live in a cheaper area – then good for them, they get to save more of their income!

    – I don’t understand the “dependents” concept. This was brought up by others in the discussion too. Why is it relevant, compensation-wise, what’s the structure of the employee-family? Buffer is a company, and should be focused on bringing value to its customer via amazing products, and not get distracted with social services / child care side-business (which this can digress to, because, for example, what’s $3k/year for a dependent child with disabilities or other special needs?).

    – *Most importantly*, how do you factor in actual performance and contribution? Is this part of “experience” somehow? If team members excel in their roles (and beyond), are they transparently financially motivated for it?

  • Christopher Sheehan

    Hi – how do you adjust for education? If there are two candidates for the same role, but one has an additional degree, how is this reflected? One could argue that the 2 years spent on the degree count as experience just like a person without the degree who spent that time working in a relevant area–unclear if one is more valuable.

  • John Larsen

    Love the formula. Glad to see an acknowledgement that growing families see additional financial pressure. I particularly like the approach of giving the option for increased stock options vs. “extra cash”. All in all a pretty nifty system that I intend to replicate as I build my digital marketing agency. Not sure I would want it to be public though. I think making such information available to employees via an intranet is EXCELLENT but not sure I would want it broadcast to the world. Openness is great but I would want to protect my employees privacy. It seems to me this could invite unwanted attention from a criminal element, not to mention potential poaching of staff by competitors… would love to hear if either of these have been an issue…

  • murateyyupoglu

    Great post, thank you, you really set a great example for everyone.

    I have one simple question.

    How do you factor in the performance of the team members in salary computation? Does over achievers / great performers get additional salary or benefits?

    Thanks,

  • ificouldfly

    I wanted to try the calculator, although my city is not included, but let’s say it is very cheap according to US standards, so I’ll choose the cheapest place. But there was no QA role? Or is it somehow disguised?:)

  • Tigran Shahverdyan

    I love your obsession with transparency! :)

    Can you share some thoughts about how do you calculate the % of role for employees that share roles? How do you change that percentage if necessary?

  • Steffan Pedersen

    This is awesome. Bravo.

  • Cek

    I am interested in knowing how the Europeans deal with taxes and health care systems in their countries.

    Could anyone working from Spain tell me?

    Thanks in advance!

  • mechthild haussler

    Great job – I fully agree with the salary transparency and your (partial) focus on needs and “good life” (sure the “family factor” will always be a bit tough to define, especially as some countries, like eg. France are already taking into account dependents much more than others through taxes versus welfare).

    Just a question: when contracting (as generally in Europe according to another blog post), how do you calculate the (daily/monthly/yearly?) rate compared to a salary? What about health insurance and other perks for contractants?

    As you are planning to increase diversity in terms of age – I am sure you will also soon be asked about retirement schemes ;-).

  • This is very cool – thanks for sharing. Question: does this calculation include bonus pay?

  • I really don’t understand why this open salary sheet. My feel is that it will make unnecessary complexity among the employees. Salaries should not be shared at any cost otherwise this will make uncomfortable among the employees. Anyway, this is my own opinion. Thanks

  • Tara

    Hey, are there part time jobs available for the Happiness Hero or any other position?

  • Ferit Demir

    Hey Courtney,
    is the calculator in meantime published as open source?
    Otherwise i would like to know, how to calculate roles “overall base” and “location base” based on numbeo or glassdoor?
    thanx

  • Tarcisio Jlle

    Hello, I’m User and super fan app buffer’m interested in working on this amazing company. I am a digital marketing consultant and inbound marketing strategies in Brazil. I would like more information to make my application to work remotely in this great project. Have a good day. Thank you!

  • daryl

    How do you determine an individual’s “Experience” level? You note it is through “discussions with each team member,” but that seems a bit vague… I am asking because my company is moving to this transparent model as well, and they are trying to determine standard “Levels” that fit all positions across the board. For example, you are a level II if you fit a, b, c (whether you are a developer, product strategist, CEO, etc.). I am not sure it is even possible to make something that fits everyone so neatly, so was wondering if the individual conversations to determine levels was your way around that?

  • Why doesn’t the location affect a CEO’s salary on your Buffer calculator? :)

  • Love this. How do you guys guess someone’s level before they start the bootcamp? Ie what happens if you find out they are a lower “experience” level then you thought pre-bootcamp?

    • Hi there Marc! That’s such a great one and takes a little bit of guessing and intuition. We’re working on thinking through a better way to be more thorough on that! :) I’m not sure we’ve had the case where someone might have been lower than we thought. We have upped folks’ experience level immediately after bootcamp before. Hope this helps! :) Thank you so much for your great questions!

  • Ashley

    This seems like an incredible culture. The transparency is fascinating and much appreciated. Breath of fresh air in today’s corporate world. As someone who works to build company’s from the inside (culture & recruiting), I know firsthand how this could be an amazing recruitment tool for the right people. Keep it up!

    • Aw thank you so much, Ashley! That means so much to hear!

  • Benjamin Todd

    This is fantastic thank you.
    My question is why are the salaries independent of scale? e.g. if Buffer became 10x bigger, then shouldn’t people get paid more, especially the C-level now managing large teams?
    If I understand, you had this feature in the previous version (e.g. CEO base increased 12k per million of monthly revenue), but it’s now gone.

    • Hey there Benjamin! That’s such a great question – we’re in the middle of thinking through a new iteration for our salary formula and I imagine it will include this and how our team members can advance (without having to be in a “manager” role, per se). I am sure we’ll share the updated formula once it’s ready and would love to hear your thoughts of it then! :) Thank you so much for your comment here and for reading the blog!

      • Benjamin Todd

        Hi Nicole, I’m making a version of the formula for my own organisation (80,000 Hours).
        I added an an extra factor that depends on scale. It’s similar to how buffer’s formula used to work, except the increase is by the square root of revenue rather than linearly with revenue. Linear seems too fast, and it means the CEO salary quickly outpaces everyone else. I’d be happy to discuss.

  • Rafael Sales

    Since you guys use the cost of living of each country, I think it would be fair to provide the same benefits people would have if they work for their own country. Example, in Brazil, we have by law: a month PTO/year, 13.5 holidays per year, paid paternity leave for 20 days, extra hours are paid in 1.5x rate if the employee doesn’t compensate as time off, 13th salary yearly, a month salary + bonus/fine if person is fired for no reason (like just reducing staff)…

    • That’s such a good point, Rafael! We are looking at a lot of these things to encourage our team members to take the holidays off of their local country and also keeping our policies open enough for local customs (especially family leave which varies so widely from country to country!) :) Really grateful for your comment — which feels like extra validation here!

  • Astoria King

    I’ve been doing some research on your company and based off what I’ve learned you guys are way ahead of the game! After reading about Buffer Apps Mission and Core Values I applied for your Happiness Hero position. Although, I’m not to avid with my social media activity I have the experience to back it up. I hope I can become a team member! I’m waiting on my email reply like christmas! Santa Claus please come to my inbox

  • Jennifer Kempson

    This is outstanding – I came across your company purely by chance and as a female engineer working in the UK IT sales industry where I feel like the term flexible and fair pay are swear words and you have to be a special case to balance life as a working mother and a rewarding career, this surely is the culture businesses need to survive and grow. In my spare time my passions are trying to get more women into STEM careers overall, and how we can do this is company behaviour just like this – flexibility, fairness and opportunity.

    Glad I stumbled upon this site…truly eye opening!

    @mamafurfur

  • schutm

    Hello, I’m wondering how all of this works out with the different tax-systems / insurance-systems in all the different countries you’ve employees in. E.g. in The Netherlands the’re some insurances and taxes to be paid over the salaries, which the employee doesn’t even see on the monthly payslip. The IRS doesn’t really care whether the employer or the employee pays for all of this, but they’re used to the fact that the employer pays for this. In addition there is an obligatory 8% holiday-pay in addition to the normal salary. And finally (I’m sure I’ve forgotten some other stuff) there is a limit to the amount parties, excursions, non-business-travelling and other perks may cost. Going over this amount will result in a 80% percent taxable. So, how do you cope with all these differences or is this left the employees to make sure they comply with all the rules?

    In addition the’re are also all kind of rules what a workplace should look like (good chair / desk, preferably adjustable hight etc.). The employer is accountable for providing good, safe working environments. Do you check this, and provide means to make sure everyone has a good working environment (considering the perks you give I guess so ;)?

  • Bram Geenen

    Hi, thanks for sharing and leading the way in transparency!
    I’ve looking at your salary spreadsheet, to see if we can learn from that how to model the salary calculations for our company.
    However I’m having trouble understanding exactly how the ‘role’ part of your formula is calculated in the spreadsheet. I understand you take an ‘overall_base’ and add a ‘location_base’ and a ‘cost_of_living_correction’ to that.
    How exactly you calculate ‘location_base’ and ‘cost_of_living_correction’ in your sheets is unclear to me. Would you be able to explain how you are using the Consumer Index and other factors to get to the number for Role?
    Thanks!

  • Katie Verigin

    Thank you for being open about this, it is so important and a great start. I do have a concern though. How is it that the only woman in the C-Suite is earning 40,000$ less than the 3 other men? I’m sure a number of things could have affected this, but I think looking into the potential gender bias in your formula is an important next step. While the calculator is gender-blind, it doesn’t account for the family and home care burden women take on. Women will always be payed less when their work as mothers and caregivers is not considered experience. If you are truly looking to address the pay-gap, you need to account for this.

  • Rena Martinez

    Hi! This is such a great idea! Loved reading about it. Just curious if you can clarify a few things – What is the “good life curve” formula and how was it determined? Do you come into a lot of challenges with determining experience level? And how was the initial idea of making salaries public received and how did you handle team members that might have been unhappy about it? Lastly- do you do regular bonuses and raises? Are location, experience, and loyalty taken into consideration the same way? Thanks!

  • Aaron

    Hey Buffer,

    How do you define if someone is a Beginner, Intermediate, Advanced or Master? It says this is determined through a discussion with each team member; is there more transparency around what is required for these levels? Are they standard criteria across all roles or change?

  • Cameron Stell

    I have been working with several startups recently and just happened to stumble upon your salary calculator. I would love to talk to you on how you developed this and how you handle equity compensation. Also, I believe a distributed workforce is definitely the wave of the future. Here is my LinkedIn profile: https://www.linkedin.com/in/cameronstell/