Find your work people. Download our app.

Pay & Salary

How to Know if You're Underpaid

Career Advice Experts

Last Updated August 5, 2021

Guide Overview

The Real Cost of Being Underpaid Check Online Data Go to Your Colleagues Ask Yourself These Questions How to Ask for a Raise When You're Underpaid Learn More

Guide Overview

A Guide to Finding Out Whether You’re Paid Fairly

Nobody wants to be underpaid, but it’s not always easy to tell if you are. After all, it’s not like your employer is going to come out and say that you deserve to be making more than they’re paying you. Fortunately, in this day and age, there are a number of different ways to figure out whether or not you’re being paid fairly.

Unlike decades past, there is a wealth of information online that can help you determine your market worth. In addition, you can also turn to your colleagues, and ask yourself some probing questions. No matter which route you take, here are some steps you can take to figure out if you’re underpaid — we'll even share how to ask for a raise when you're underpaid.

The Real Cost of Being Underpaid

It’s clear that you lose money in the short run when you’re underpaid, but it’s important to keep in mind that that money also adds up. Glassdoor research has revealed that the average American could be earning $7,528, or 13.3 percent, more per year than his or her current annual base salary. But given that subsequent raises are often based on what somebody is currently making — for example, your employer might choose to give you a twelve percent raise upon receiving a promotion — that gap is often compounded further over time. A study conducted by George Mason University and Temple University found that being underpaid, and failing to negotiate, could cost you $600,000 throughout your career.

So if you want to not only bring home a larger paycheck today, but also increase your net worth in the long run, it’s imperative that you figure out whether or not you’re being underpaid, and then act on it, as soon as possible.

Check Online Data

Once upon a time, salary information was only available to those in the recruiting industry for a hefty pricetag. But with the advent of the internet, much of this information is right at your fingertips — often for free. Turn to Glassdoor’s salary tool to search among millions of real salary reports and find out what people with your job title, in your area, are earning.

Search by job, company and location to see average wages, then take a look at how yours stacks up. If you’re earning less, you might just be underpaid.

Another Glassdoor tool you can leverage is Know Your Worth. Just enter a few data points like your job title, company, location, years of experience and more to get a free, personalized estimate of what your market worth is.

Again, if this estimate is higher than what you’re currently making, it’s likely that you’re being underpaid.

Go to Your Colleagues

If you’re looking for some secondary data points to confirm your suspicion that you’re being underpaid, and if you’re comfortable doing so, you may consider discussing your pay with your co-workers. If you’re intimidated by the idea, consider that it’s illegal for employers to prohibit discussion of pay at work. However, just because you are legally allowed to do so doesn’t mean that the practice of openly discussing pay is socially accepted at your workplace — so if you do choose to ask a colleague about their salary, approach the topic carefully.

Go to somebody you know well, and feel comfortable discussing sensitive issues with. You could also speak to a former coworker, who may be more open to speaking about their pay now that it’s no longer relevant. Choose a private location to hold the conversation, and make it a low-pressure situation.

Barry Maher, career consultant, speaker and author, recommends two specific tactics to help put people at ease: sharing what you make first, and discussing pay in terms of a range versus exact figures. He recommends saying something like:

“I’ll be talking with my boss about compensation at some point soon, and I’m just trying to get a rough idea of what I should be looking for… To give you an idea of I’m getting right now, it’s roughly XYZ. Is that the kind of range you’re in as well?”

You may not get a response — and if you don’t, be understanding — but if you do, it can be one more data point for you to reference.

Ask Yourself These Questions

Still aren’t sure whether or not you’re being underpaid? Ask yourself the following questions.

Have I moved companies within the last five years? It’s great to be loyal to a company, but it can come with drawbacks. Employers hoping to lure job candidates away from their current positions often sweeten the pot with a higher salary, which employees staying at their companies miss out on. They still might get raises, but they tend to be smaller.
Did I negotiate my salary when I started this job? If you never negotiated your salary, there’s a very good chance that you left extra cash on the table. When employers extend offers, they usually expect that candidates will try and push back for more — and their initial salary offers reflect that.
Is my salary keeping up with inflation? Unfortunately, every year, your dollar is worth a little less. So far in 2018, the rate of inflation is 2.1 percent, according to the Bureau of Labor Statistics — so if your salary hasn’t increased by that much this year, you are, in effect, being paid less than you were last year.

How to Ask for a Raise When You're Underpaid

It might not feel great to know that you’re underpaid — but know that there’s power in knowledge. Now, you can act on this information by asking for a raise. For bests results, follow these steps.

Set up a meeting with your boss. This topic is serious enough that you don’t want to just casually mention it in your weekly one-on-one with your manager. Give yourself the time you need to effectively discuss your problem and state your case for why you should be making more.
Come prepared with data. Saying “I feel like I’m underpaid” without being able to prove it won’t fly. If you expect your employer to increase your pay, you need to give them concrete proof that backs up your statement. Print out your findings from Glassdoor and other online data sources, or compile them in a Word document with links back to the sources.
Share your successes. Another effective way to convince your employer that you deserve to be making more is to highlight how you’ve been contributing to your business’s bottom line. Outline some of the most important projects you’ve been working on, and describe how they’ve impacted your business. To really drive home your point, cite concrete metrics (e.g. “my lead generation efforts have resulted in an additional $200,000 in the pipeline”).
Anticipate setbacks. As the saying goes, you should hope for the best, but expect the worst. Look up some of the common reasons employers turn down requests for raises, and brainstorm in advance how you’ll handle them. For example, if your manager tells you there’s no money for raises right now, you could ask for better benefits, like the ability to work from home, or ask them to commit to revisiting the conversation in three months.

Hopefully, the conversation goes well, but if it doesn’t, try not to despair. If your current employer won’t pay you what you deserve, know that there are plenty of other companies out there that will — it’s just a matter of finding the right one.