How Companies Set Salaries for Remote Jobs

Remote salary decisions usually come down to one question: does the company pay for the role, the person’s location, or a mix of both?

For a related Working Nomads article, read reasons why you are not hearing back about remote jobs for remote teams before you decide your next step.

There is no single correct model. SHRM notes that companies can use different remote pay strategies, but the plan should be competitive, consistent, and fair in its remote pay strategy guide.

Use headquarters-based pay

Some companies pay remote employees based on the company’s headquarters market. This model is simple and can feel fair when everyone in the same role uses the same pay band.

Upside: Easier to explain and easier to manage.
Tradeoff: It can become expensive if the headquarters sits in a high-cost labor market.

Use employee-location pay

Some companies adjust pay based on where the employee lives. This model tries to match local labor markets, local costs, or both.

Upside: Can help control payroll costs across regions.
Tradeoff: Employees may see it as unfair when two people do the same work for different pay.

Use national or role-based pay

Some companies set pay from national ranges or role-based bands. The BLS Occupational Employment and Wage Statistics program publishes wage estimates by occupation and area, which can help companies benchmark pay without relying on guesswork.

Upside: Easier to compare roles across locations.
Tradeoff: A national range may miss local hiring pressure in very competitive markets.

Compare pay strategies

Strategy	Main Focus	Main Risk
Headquarters-based pay	Same role, same company market	High cost in expensive headquarters markets
Employee-location pay	Local labor or living costs	Fairness concerns across teammates
Role-based pay	Skills, level, and market range	May need extra adjustment for hard-to-hire roles

The strongest remote pay plans are clear before the offer stage. Candidates should know whether location affects the salary, what range applies, and how the company handles relocation.

What to Read Next

Read two strategies to find your next remote job if you want a related next step on job search.
Use how to respond to a job offer for job seekers when you need more context before your next decision.