How to Set Fair Pay for Remote and Hybrid Roles

Not long ago, remote work felt like a temporary fix — a business continuity strategy designed to get us through an unthinkable global health crisis. Today, remote and hybrid work are the norm for huge parts of the workforce. A recent Gallup study shows that 55% of global workers are remote in some capacity; in the US alone, one in four workers are fully remote. 

Even in the wake of stern return-to-office (RTO) mandates delivered by the likes of Dell, Disney, Amazon, and Instagram, remote and hybrid numbers remain strong. Gallup’s research finds little difference between 2022 and 2025 numbers despite the rise in RTO. It’s clear that this is how modern teams operate.

Side by side with this shift sits a tougher truth: remote and hybrid workers are often treated differently when it comes to pay and progression. Many are less visible to decision-makers, and some live in lower-cost areas, prompting assumptions about what they “should” earn compared with colleagues in expensive hubs. Others miss out because presence is mistaken for commitment. 

To accommodate all of these variables, companies must design deliberate pay practices so remote, hybrid, and on-site teams are all paid fair compensation for the work they do. 

How proximity and location bias impact pay 

Remote work changes where people sit, and often, it can impact how much they’re paid, too. A 2025 university study of 1,000 UK workers found that remote workers were 11% less likely to be promoted and 9% less likely to receive a pay rise than on-site colleagues. Hybrid workers also missed out: they faced an 8% lower chance of promotion and 7% lower chance of a raise.

Even when researchers told managers that remote employees performed as well as on-site employees, bias still reared its head. Remote workers were still 10% less likely to be promoted and 6.5% less likely to receive a pay increase.

But proximity bias isn’t the only factor shaping pay. Location plays a part too. Employees based in lower-cost regions are often assumed to “need” less than colleagues in expensive hubs. Others feel penalised for choosing to live outside commuting distance, even when their output matches their peers. Without clear rules, location decisions can become just as subjective, and just as unequal, as visibility bias.

Acknowledging that both types of bias exist doesn’t mean every organisation must follow the same approach to paying remote and hybrid staff. “Fair” will look different from one company to the next, and that’s fine. What matters is choosing a structure on purpose and applying it consistently.

What approaches do companies use to pay remote and hybrid teams?

Organisations have solved this challenge in several ways. To give you a sense of the range, here are a few of the most common approaches and the companies using them today.

How to implement fair pay for remote and hybrid roles 

Once you’ve chosen the approach that fits your organisation, the next step is turning it into something employees can rely on. Here’s how to build a pay policy that works for remote, hybrid, and on-site teams alike.

1. Write down how location influences pay

Remote employees can’t rely on informal context, so clarity in your communication is essential as you spell out exactly how location impacts pay in your model. This doesn’t need to be a manifesto, just a short explanation that gives everyone the same starting point. Ask:

• Does someone’s location affect their base salary?
  
  • If yes, which locations fall into which tiers or benchmarks?
  • If no, how do you keep salaries stable as hiring spreads globally?
• Are remote workers treated differently from office-based workers in any circumstance?

2. Sense-check your salary data through a distributed lens

A salary range that works for one city may fall flat in another. If you’re hiring across countries or regions, your data needs to match that reality. Ask:

• Are your ranges built on reliable, role-matched market data?
• Does your pay benchmarking source actually cover the countries you hire in?
• Where do you risk overpaying or underpaying remote talent because your data is too narrow?

Note: With Figures, you get accurate, location-aware salary data that keeps ranges anchored to real markets rather than guesswork or outdated spreadsheets.

3. Define how location comes into pay decisions

Stick to a simple set of rules rather than letting your remote pay policy be overrun by exceptions and edge cases. For example, decide:

• Will new hires be placed using the same structure as existing employees?
• What happens if someone relocates to a higher- or lower-cost area?
• Do you treat remote and office-based employees the same when reviewing salaries?
• Are there any roles where location should influence pay (e.g. on-call, travel-heavy roles)?

You’re not dictating one “fair” answer; you’re removing ambiguity.

4. Run location fairness checks, not just pay reviews

Most bias around remote work shows up in patterns rather than singular decisions. A half-hour of analysis can prevent years of drift, so after each cycle, compare outcomes across working patterns:

• Are remote workers clustering at the bottom of ranges?
• Do hybrid employees see smaller adjustments than on-site peers?
• Are certain locations consistently underpaid relative to the market?
• Have relocations created compression or inconsistencies?

5. Give managers practical tools for remote pay conversations

Managers need confidence more than scripts, especially when speaking with remote employees who can’t pick up cues in person. Equip managers with:

• A clear explanation of how your pay model works
• The logic behind location rules (or why you don’t use them)
• Examples of how you place new hires in ranges
• How to respond when employees compare themselves to colleagues in other locations

Bring your remote and hybrid pay model to life with Figures

A fair pay structure only works when it’s grounded in real data and applied consistently — especially when your team is spread across multiple cities or countries. Figures gives you the tools to do this with confidence. You get reliable, location-aware salary data, clear salary bands that work across markets, and review tools that help you spot gaps before they turn into problems.

Whether you choose a single global compensation rate, location-adjusted pay, or an HQ-anchored model, Figures helps you run your approach in a way that feels stable, transparent, and fair to every employee, wherever they work. Book your free demo today to get started.