PostHog Handbook Library / People

2,744 words. Estimated reading time: 13 min.

# Compensation

Auto TL;DR

## At a Glance

This long page covers these main areas. The list is generated from the article headings, so it updates with every handbook rebuild.

1. How it works
2. Level
3. Step
4. Benchmark
5. Location factor
6. Executive compensation
7. Pay reviews
8. How the review process works

### How it works

We have a set system for compensation as part of being transparent.

You can use our compensation calculator below to see what your compensation might look like when you're joining PostHog, and to see how it might develop over time:

We think the fastest possible shipping comes from a leaner and stronger team. We pay generously, so you'll work with the best people in the world.

Important:

- If we are missing your country, it simply means we've not hired there before so we'd need to put together some data in advance of hiring you.
- If you're considering applying to PostHog and the salary is the only blocker, then something is wrong with our model (as we aim to pay generously) for your circumstances in most cases. Please tell us as part of the hiring process and we will review things.

#### Level

Level does not correlate with increased importance, but with impact within PostHog. Your level is _not_ a title - we don't believe in having a huge hierarchy of roles, as everyone needs to feel like the owner of the company that they are.

Very broadly, we think of the various levels as:

- Junior: contributes to small or function-specific projects (note, we rarely hire people at this level)
- Intermediate: owns small to medium sized projects
- Senior: owns and drives large projects or a whole product, decides what needs to happen and does everything necessary to get that done
- Staff: same as senior, but also _consistently_ owns and drives large projects that impact the entire company, not just their product, team or even function.
- Director: someone who is operating at the highest levels, usually a member of the Blitzscale team and usually a manager of managers
- Principal (same level as Director): same as Staff, but with extremely rare skills or operating at a very high level.

It's important to note that this is not a checklist. These descriptions are indicative, and there will always be a degree of judgement by the to decide which level you're at, also based on other people within PostHog.

#### Step

Within each level, we believe there's a place to have incremental steps to allow for more flexibility. We define these as follows:

- Learning: Starting to match expectations.
- Established: Matching expectations.
- Thriving: Exceeding expectations.
- Expert: Exceeding expectations consistently.

With exception of team members at the very beginning of their career or where it is their first time in this type of role, we hire into the Established step by default. This will give everyone the opportunity to be set up for success and leave enough room for salary increases, without the need to move up in seniority.

Here's how to move from one step or level to another.

#### Benchmark

In line with our compensation philosophy, the benchmark for each role we are hiring for is based on the market rate in San Francisco.

We use Pave as our main source for our salary benchmark and build a target range based on that data.

Because the engineering market is very competitive, and we think there is a 10x difference between an average and a top engineer, we pay near the top of market, which we define as being the 90th percentile, at the time of review. For other roles we still try to pay towards the top of market, which we define as 50th percentile + 20%.

#### Location factor

Most of our location factors are based on GitLab's location factors. Location factors are based on _cost of market_, not cost of living. This means that we look at how much it typically costs to hire a person in that role in that location, not how much it costs to live there. This is why, for example, our location factor for San Francisco is the highest, even though there are several other places that are more expensive to live.

We set a floor of 0.8 in the US, and 0.6 everywhere else, to avoid creating huge disparities in pay if someone happens to live in an exceptionally low cost of living country/state.

GitLab uses a combination of data from Economic Research Institute (ERI), Numbeo, Comptryx, Radford, Robert Half, and Dice to calculate what a fair market rate is for each location. Read more on how GitLab calculates this location factor.

The location factor takes your local exchange rate into account, so we don't have to keep updating exchange rates when they fluctuate. The floor also helps mitigate this. You will always be paid in your local currency, unless there is a very good reason not to (e.g. it is normal in your country to transact in USD).

#### Executive compensation

For hiring into executive roles, we use a separate database of compensation benchmarks rather than this calculator. The terms of access to this (paid) database means that we're not able to share it publicly.

The benchmark data is all we use for executives. As a rule, executives are paid above average but not top of market.

The reason for less sophistication here is that we have very few executives, and only one for each role by definition. It's irrational to create a system so that, within a given benchmark, people are paid equally when there is just one person to consider!

### Pay reviews

We review pay proactively and currently run pay reviews for the whole team 3x per year - usually around March, July, and November. You do not need to do anything - our goal is to keep your compensation at an appropriate level without you having to ask.

As we do these much more frequently than regular companies, team members should definitely not expect these to result in a change to their Step or Level each time - mostly they will stay the same. Additionally, team members will find that their Step, or place within a Step's range, will change more frequently than their Level.

Finally, we may change pay without editing Step or Level if the market rates for the underlying benchmark have gone up. When we review pay we don't take inflation into account, as this is already accounted for by market data. Thus, you won't get a yearly "inflation raise" as is typical in many localities, though our review process and benchmarking ensures your salary will remain in-line with the market.

We do also regularly increase benchmark levels when we are making a deliberate attempt to raise the bar in terms of hiring. This means that, when a benchmark is increased, it's not unusual for your level and step to come down. You will still get a pay increase, just not always at the same % increase as if the benchmark alone went up.

#### How the review process works

To make sure everyone has an equal chance at getting a pay rise, we do not factor in how frequently someone requests one. When increasing pay we only look at our calculator and performance. This helps us to be as inclusive as possible, as underrepresented groups are statistically less likely to request a pay rise.

We want to increase pay as frequently as we can in a proactive way, rather than putting the onus on the team member to negotiate every time. We don't make any changes outside of these reviews - if you change role for example, any changes will usually happen at the next closest review.

Any increases will be communicated by the relevant Blitzscale team member, as compensation is not a manager's responsibility at PostHog. If you need to talk to someone about your compensation or how the calculator works, you should ask the relevant member of the exec team in the first instance.

You will only hear from them if there has been a change in your pay, not if it is staying the same.

If you recently accepted an offer at PostHog and the benchmark changes between you accepting and joining PostHog, your pay will be re-assessed during the next pay review. Often this just means adjusting benchmark, step, and level - it is unlikely that your actual pay will go up.

#### Relocating

If you're planning on relocating, your salary may be adjusted (up or down) to your new location. This will be done at the next compensation review. If this represents an increase in pay, _we need to approve this change in advance_ - we cannot guarantee it is always possible, as our budgets may not allow it.

If you are nomading, we will set your location factor for the place that you are spending the most time in over the next 6 months. Our frequent compensation reviews mean that we can make adjustments reasonably frequently, but again any increase needs approval in advance.

> Please note that there are a few countries that we don't employ people in.

### Equity

It’s important to us that all PostHog employees can feel invested in the company’s success. Every one of us plays a critical role in the business and deserves a share in the companies success as we grow. When employees perform well, they contribute to the business doing well, and therefore should share a part of the increased financial value of the business.

As part of your compensation, you will receive share options in the company. We do not have a strict calculator here, but broadly you receive equity based on your role, level and location. Our general philosophy here is average equity, with extremely employee-friendly terms and options for liquidity through secondary.

Whilst the terms of options for _any company_ could vary if we were ever acquired, we have set them up with the following key terms which we believe are industry-leading in their friendliness to employees:

- Standard 4-year vesting with a 1-year cliff
- 10 years to exercise your options in the event that you leave PostHog
- Double trigger acceleration, which means if you are let go or forced to leave due to the company being acquired, you receive all of your options at that time
- Vesting starts from your start date (not after a "probation period" or similar)
- For UK-based team members, eligible options are part of the EMI share options scheme or the CSOP scheme, which are tax-advantaged

It can take time to approve options, as it requires a board meeting and company valuation. We can clarify the likely time frame at the time we're hiring you. Vesting will always start from when you joined PostHog, not from when you receive your option agreement. While we can commit to a particular number, we cannot commit to a particular strike price when offering share options, as the valuations are done by a third party and can vary depending on where we are in our funding cycle.

Check out our share options FAQs to learn more.

#### Equity refreshes

Every employee will be eligible for equity refreshes each year you are working at PostHog. These grants are between 18%-25% of the value of a new grant for your current role. The percentage is based on your performance and can vary year by year.

These equity refreshes will be decided at our pay review cycles that happen 3 times a year, in roughly March, July & November, and are communicated by the relevant #team-blitzscale member at that time. Grants are approved quarterly by the board, though vesting is back-dated begins on the actual anniversary date. You'll be made aware of your grant being approved when you get an email from Carta regarding the grant. These refresher grants will be on the same terms as your original grant with a 12 month cliff, they will likely be subject to a different strike price due to changes in valuations.

Funding rounds disrupt when we are able to issue new grants, so approvals my be delayed if we are actively fundraising.

### Probation period

We are fully committed to ensuring that you are set up for success, but also understand that it may take some time to determine whether or not there is a long term fit between you and PostHog.

Subject to certain exceptions for sales roles and German employees mentioned below, the first 3 months of your employment with PostHog is a probation period. During this time, you can choose to end your contract with 1 week's notice. If we chose to end your contract, PostHog will pay you 4 weeks' base salary pay, but usually ask you to finish on the same day.

People in sales roles, such as Account Executives, have a 6 month probation period - this is to account for the fact that it can be difficult to establish whether or not someone is able to close contracts within their first 3 months, given sales cycles.

German employees also have a 6 month probation period - this is to align with market standard best practices and expectations for hiring in Germany, as it can be operationally difficult to part ways with German employees so we ask for as much information as possible to establish whether the hire is a good, mutual, long-term fit. During probation, either PostHog or the German employee may choose to end the employment contract with 1 month notice.

Your manager is responsible for monitoring and specifically reviewing your performance throughout this initial period. If under-performance is a concern, or if there is any hesitation regarding the future at PostHog, this should be discussed immediately with you and your manager.

At the end of your probation period, you won’t usually receive formal confirmation that you’ve passed probation, the default is no communication. By that point, you should already have a clear understanding of your performance and progress through your 30/60/90-day check-ins with your manager.

### Severance

At PostHog, average performance gets a generous severance.

If PostHog decides to end your contract after the first 3 months (6 months for sales roles), we will offer you a total of 4 months of base salary (which includes any time we need to give you under the law). To receive these benefits, we will ask that you sign a standard post-termination certificate or release. For our German teammates who have completed their 6 month probation, we will follow the local legal requirements for notice and severance, in line with what is typical in Germany. In some cases, we might ask you to stop working right away and pay you instead of having you work through your notice period, or set up a "garden leave" depending on what is most appropriate for your location and contract. If the decision to leave is yours, then we generally just require 1 month of notice, though this can vary depending on your country's laws or the specifics of your contract.

If you are in a role with a commission/bonus component, you will be paid the amount you are owed as of your last day at PostHog.

We have structured notice in this way as we believe it is in neither PostHog's nor your interest to lock you into a role that is no longer right for you due to financial considerations. This extended notice period only applies in the case of under-performance or a change in business needs - if your contract is terminated due to gross misconduct then you may be dismissed without notice. If this policy conflicts with the requirements of your local jurisdiction, then those local laws will take priority.

### Contracts

We currently operate our employment contracts in the three geographic regions where we have business entities:

- United States of America
- United Kingdom
- Germany

This means, if you live in one of those countries, you will be directly employed by PostHog or the applicable subsidiary as an employee in one of our entities.

If you live outside the US, the UK or Germany, we use Deel as our international employer of record. This means you are technically employed by Deel on our behalf. This doesn't affect your rights or benefits.

In some cases, you may be an independent contractor, in which case you will invoice us monthly via Deel. Deel offers pretty much all countries and currencies. As a contractor, you will be responsible for your own taxes.

### Payroll

In the UK and for international contractors, we run payroll monthly, on or before the last working day of the month.

In the US, we run payroll twice a month, on the 15th and on the last day of the month.

Deel runs payroll on the last working day of the month.

Canonical URL: https://posthog.com/handbook/people/compensation

GitHub source: contents/handbook/people/compensation.mdx

Content hash: `330dbc1bd8eb839f`

Static reader notes

- `MDX_COMPONENT_STATIC_ADAPTER`: Adapted interactive MDX components for static reading: CompensationCalculator, SmallTeam.