# Pay Grades

A **Pay Grade** is a named level (e.g. "L1 Associate", "Sr. Executive", "VP") that compensation can
be organised around. Found under **Payroll → Configuration → Pay Grades**. Verified live on
demo.blueonehr.com, 2026-09-13.

<div class="bon-video">
<iframe src="https://www.youtube-nocookie.com/embed/nkGQhVWbCiI" title="Set up salary: pay grades, components, templates" width="560" height="315" frameborder="0" loading="lazy" allow="accelerometer; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>
<p><a href="https://www.youtube.com/watch?v=nkGQhVWbCiI">Set up salary: pay grades, components, templates</a></p>
</div>

## What a pay grade carries

Each grade has an order (its rank), a name, a short code, an optional set of **bands** (a salary
range, e.g. "Standard: ₹30000–₹50000"), and a status. On the demo workspace, six grades existed —
**L1 Associate**, **Executive**, **Sr. Executive**, **Lead**, **Sr. Manager**, and **VP** — all
**Active**. Only L1 Associate had a band configured (Standard: ₹30,000–₹50,000); the rest showed "No
bands", meaning a band is optional, not required, for a grade to exist and be used.

![The Pay Grades list: six active grades from L1 Associate to VP, with one band configured on L1 Associate and none on the rest](https://docs.blueonehr.com/uploads/images/gallery/2026-10/uaUpayroll-pay-grades-list.png)

## Related

- [Salary Templates](https://docs.blueonehr.com/books/payroll/page/salary-templates) reference a Pay Grade.
- [Compensation Policies](https://docs.blueonehr.com/books/payroll/page/compensation-policies) can scope to a Pay Grade.
- [Contracts](https://docs.blueonehr.com/books/payroll/page/contracts) carry the actual wage an employee is paid, separately from
  whatever grade or template it may have been derived from.