Are your salary ranges too broad?

While more employers are disclosing salary information in job postings, broad pay ranges may have a negative effect on potential job candidates — and employers, according to two experts.

In 2026, more than half of Canadian jobs included information on salaries and wages, according to the Indeed Hiring Lab. The increase is mainly driven by recent changes made to the Employment Standards Act (ESA), which took effect Jan. 1 of this year.

Ontario's pay transparency legislation was passed with the goal of helping eliminate systemic gender and diversity wage gaps. Under the act, all employers with 25 or more employees are required to include information on salary ranges or hourly rates of the expected compensation for the role in job postings. The only time employers are not required to include compensation information is if the position pays more than $200,000.

Prince Edward Island was the first province to introduce pay transparency legislation in 2022; British Columbia followed in 2023, requiring compensation information on job ads and, for larger employers, annual pay gap reports.

Wider, less-precise pay ranges

But even with the new laws in place, salary ranges listed in job postings have also become wider and less precise. According to the Indeed report, in the second half of last year, the median salary range on job ads went from 16 per cent to 18 per cent. To put that into context, a salary range from last year would show $100,000 to $116,000 but now it shows a range $100,000 to $118,000.

Employers might choose to advertise broader salary ranges “to give themselves some margin for manoeuvring,” says Stepan Arman, senior director of Indeed Canada. Broader ranges help with recruiting candidates with varying levels of experience.

However, employers should avoid using them to simply comply with or get around transparency requirements, he says.

“If employers are using it as a way to… perhaps negate some of the imposed or legislated salary transparency requirements, then I think that that's something that needs to be addressed.”

For Nita Chhinzer, associate professor of leadership and organizational management at the University of Guelph, salary ranges should never exceed a 20-per-cent window; beyond that, they become too wide and defeat the purpose of pay transparency.

"The value of pay transparency gets diminished because the user of that information, in this case the job seeker, is unable to really identify the level and value of that job to the organization," she says.

When salary ranges become too broad

For candidates, pay transparency is intended to help them make informed decisions, but if a salary range is too broad, that tends to lead to more confusion than clarity, Chhinzer says.

“When you have a huge range like that, it's really hard for job seekers to say, ‘This is a legitimate organization that's not going to try to lowball me or is not going to try to underpay me.’”

Wide salary ranges can take away the chance for candidates to self-select whether they might be a good match for the job, she adds, which can lead to overly large application pools for HR to sift through. Some of those applications include those who were never going to accept the role in the first place if the offer reached the low end.

“There are some people I know who won't accept a job below this much money because it's not comparative to what they're currently getting paid, or they think that they're worth this much because they have a mix of education and experience. So, they're not willing to accept low-ball job offers,” Chhinzer adds.

Total rewards in focus

Overall, the pay transparency act and what it was meant to do, Chhinzer says, holds a level of naivety.

Compensation is not always just tied to salary bands or wage information — it's the bonuses, health-care incentives and perks. Candidates might interpret the salary range as the full value of the role when other elements around employee benefits are just as important.

“In that total rewards conversation, salary is just one piece of the pie,” she says.

Pay transparency doesn't just affect job seekers. It can also affect current employees, who can also see the public job posting, creating an internal equity issue, Chhinzer says.

“You might be offering incoming wages that are higher or lower than what you're currently paying your existing employees. Your existing employees can publicly see these job ads and the rate of pay,” she says, so existing employees may feel new hires are getting a "privilege" they never received, Chhinzer says.

Create meaningful salary ranges

So what are the best practices HR should take when adding salary bands in job postings? Both experts say the focus should be on making sure salary information is meaningful to the job seeker.

Arman suggests HR should establish salary bands internally in advance before posting job ads. Every employer, regardless of the number of employees, should have a defined pay range for each role before hiring begins. Additionally, whether a salary range should be wider or narrower should be determined by the role.

“Are we going to have, perhaps in some roles… a 12-per-cent range up or down? Perhaps in other roles, we want to tighten it up and make it more... maybe it's a more entry-level role?” he says.

“Having things mapped out, charted out before you actually go to market with this stuff is very, very important... as an actual HR policy.”

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