Startup Compensation: Salary Bands and Benefits
Startups compete for people against companies with deeper pockets. Fair, consistent pay, a clear equity story and a few benefits people value usually win more than a high salary alone.
How should a startup set salaries?
Set bands per role and level, based on market data for your location and stage, and offer within them. Decide your position, for example market cash for senior roles and slightly below market plus more equity for early hires, and apply it to everyone. Consistency avoids pay gaps you can’t explain later.
| Role and level | Band | Options |
|---|---|---|
| Engineer II | $105,000 to $125,000 | 4,000 to 6,000 |
| Senior engineer | $135,000 to $160,000 | 8,000 to 12,000 |
| Product designer | $100,000 to $125,000 | 4,000 to 6,000 |
| Account executive (base) | $80,000 to $100,000 | 3,000 to 5,000 |
How do pay transparency rules affect startups?
Bands are now partly public. B.C. requires expected pay or a range in all public job postings (B.C. pay transparency). Ontario requires a range of no more than $50,000 for employers with 25 or more employees from January 1, 2026. Posted ranges make internal bands visible, so set them carefully. Posting rules are covered in the startup hiring process.
How should you balance cash and equity?
Offer a choice only if you can explain it well: for example, two packages with more cash or more options. Early employees often accept lower cash for more equity; later hires usually want market cash. How options work and are taxed is covered in employee stock options.
Which benefits matter most?
- Health and dental: in Canada, a group benefits plan topping up provincial coverage; in the US, health insurance is often the deciding factor.
- Retirement: group RRSP matching in Canada, 401(k) in the US, often later.
- Time off: above the legal minimum, clearly written.
- Flexibility: remote or hybrid work and equipment budgets.
- Learning: a yearly budget for courses or conferences.
Statutory deductions such as CPP and EI are covered on the CRA payroll pages.
Pay inside the bands.
Bands keep pay fair and defensible as you grow. Exceptions are what create resentment and pay gaps.
What should you set up?
- Write bands for every role you hire in the next year.
- Decide your cash and equity position and apply it to everyone.
- Choose a small group benefits plan at around five to ten people.
- Review pay once a year against the market.
- Keep pay decisions documented.
Then make it part of every offer: offers and contracts.
Frequently asked questions
How do startups set salaries?
With bands per role and level, based on market data for the location and stage, applied consistently.
Do startups pay less than big companies?
Often less cash, balanced with equity, flexibility and growth. Senior hires usually expect market cash.
Do I have to post salary ranges?
In B.C., for all public job posts. In Ontario, for employers with 25 or more employees from January 1, 2026.
When should a startup add health benefits?
Often at around five to ten employees in Canada; earlier in the US, where health insurance matters more.
What is a group RRSP match?
A Canadian retirement benefit where the employer matches employee contributions to a group RRSP up to a limit.
How often should startups review pay?
At least once a year, against current market data.
Sources & further reading
Employment and tax rules change. These government sources let you check the current requirements directly.