What (Definition)
Minimum Annual Salary is the actual minimum salary of current employees. This is based on the annual salary agreed with the employee and not the salary paid to employee so far.
Why (Benefits)
Minimum Salary is usually helpful to know within a specific salary grade or pay grade. Jobs are usually assigned a specific salary grade and each grade has a minimum and maximum salaries as guidelines. This actual minimum salary can be compared to the minimum salary set for the specific grade to ensure that the policy guidelines are followed.
How (Calculation?)
Formula: Min of Actual Annual Salaries of Employees
If we have a list of employees and their salaries, we can calculate the minimum.
In this example, Adams has the minimum salary of $20,589
As mentioned earlier, the metric is useful when segmented by job grade. If the job grades are A, B, C and D, we can calculate the minimum salary for each grade.
Let’s look at this chart below.
