Remote Work and the Death of Geographic Pay

The spreadsheet had 43 rows, one for every labor market the company cared about, and a compensation consultant in Chicago who helped build it in 2021 still remembers the exercise fondly. San Francisco sat at the top, where a senior engineer was worth about $205,000. Columbus held the middle at $165,000, and a cluster of smaller cities sat near the bottom, around $145,000. Every remote offer the company extended that year pulled a number from that grid, adjusted for the applicant's ZIP code. It felt precise. It was, in hindsight, the high-water mark of a brief and strange era in American pay.

That era is ending. Location-based pay — pricing a remote salary by where the employee lives — became the default at many large employers between 2021 and 2023, and it has been in retreat since 2024. Surveys from Payscale and Remote.com show the share of remote employers adjusting pay by location falling year after year. Job-posting data point the same way: remote roles are increasingly priced on national bands, with no discount for an applicant's address. This article traces how the pay-by-ZIP-code era began, why companies are dismantling it, and what the shift means for workers in low-cost cities, who stand to gain the most.

The stakes are concrete. A product manager in Tulsa hired in 2022 at a 22 percent discount to the San Francisco rate may now sit on the same pay band as a colleague in Palo Alto — a difference of tens of thousands of dollars a year, decided not by merit or role but by which side of the country an applicant happened to live on. For employers, the question is whether the discount was ever worth the resentment, the turnover, and the lawyers.

Location pay was never new

Geographic pay did not begin with remote work. For decades, employers quietly paid less in smaller markets, and the pattern shows up in federal statistics. A mechanical engineer in Wichita earns about 40 percent less than one in San Jose doing comparable work, according to the Bureau of Labor Statistics' metropolitan wage data (bls.gov). Regional price parities, also from the BLS, explain part of the gap: housing and services cost less in Wichita, so a smaller paycheck can still buy a middle-class life. The pay difference was never as large as the cost difference, which is exactly why employers liked it.

Economists have long called this the urban wage premium — the extra pay attached to working in a big, productive city — and workers accepted the trade. Earn more in New York, spend more in New York. The discount stayed invisible to white-collar employees because they worked where they lived. No one framed a Manhattan salary as a location adjustment.

The remote-work experiment of 2020 changed the frame. When roughly half of paid workdays moved into homes that spring, according to Pew Research Center data (pewresearch.org), the question of which location governed pay became unavoidable: the employer's office or the employee's kitchen table. Employers had to choose, and most chose the table. Then they had to price it.

What followed was a burst of improvisation. Some companies froze pay; some raised it; a growing number built formal location ladders. By mid-2021, the phrase "pay by ZIP code" had entered the compensation vocabulary, and the era had a name before it had a history.

The pay-by-ZIP-code era

The logic seemed sound. If an employee in Boise worked remotely, why should the company pay a San Francisco rate? Stripe told employees in 2021 that pay would be set by where they lived, not where the company was based. Meta said remote hires would be paid by location. Google adjusted pay for some remote employees — in cases reported at the time, by 15 to 25 percent. Each decision made headlines, and each made the practice more normal. The announcements were couched in fairness language: pay for the work, not the weather. Employees read them as budgets.

Compensation teams responded with engineering. They built zone maps — often three or four tiers, from major coastal metros down to everyone else — and attached a differential to each. Some companies went finer, pricing dozens of metros individually, the way the Chicago consultant's spreadsheet did. A 2022 Payscale survey found that more than half of remote employers adjusted pay by location in some form (payscale.com). Surveys of distributed companies by Remote.com told a similar story: after role and experience, location was the most common factor in setting remote pay.

The era had its own folklore. Recruiters traded stories about candidates who gave a friend's address in a cheaper ZIP code to hold a higher band, then moved anyway. A recruiter in Austin who has negotiated more than 200 remote offers remembers the reverse: candidates who moved from the city to the suburbs mid-offer, watching the number fall by 10 percent between the first call and the signed letter. A talent leader at a Midwestern bank told of a candidate who asked, straight-faced, whether the company would raise his pay if he moved to a more expensive city while employed. It would not. He moved anyway and accepted the cut.

One product manager in Tulsa priced her own move. Offered a remote role in 2022 with a 22 percent location discount, she calculated the rent savings against the pay cut in about 90 seconds and took it. Two years later, the discount disappeared, and the arithmetic flipped.

The spreadsheets and the loopholes

The discount had a second life as a management tool. Keeping remote pay below office pay made a return to the office cheaper for the company, and it kept some teams anchored. But it also produced the thing compensation professionals fear most: visible inequity. Colorado's pay transparency law, in effect since 2021, forced employers to post salary ranges; New York's followed in 2022. Once ranges appeared on job postings, a candidate in Nashville could see the same role priced differently by city, and employees could compare themselves to teammates doing identical work.

The comparisons did not stay internal. Pay-equity lawyers began asking why two remote engineers with the same title, the same performance rating, and the same manager earned 20 percent differently because of an address. Faced with defending differentials in writing, some employers quietly concluded the discount was not worth it.

A pay-stub line item made the problem concrete for many employees: the "geo differential" appeared as a line of its own, sometimes positive, sometimes negative, and it turned location into a number anyone could see. Once a number exists, someone will question it. The ZIP-code era made its own case for the prosecution. Companies that kept the line were announcing, in effect, that geography was a feature of their pay philosophy.

The retreat, in the data

The retreat began in 2024 and accelerated through 2026, and it shows up in the numbers. In a 2025 Payscale survey of more than 1,700 employers, roughly a third said they still adjusted remote pay by location, down from more than half in 2022. Remote.com's 2025 survey of distributed companies found about a quarter still pricing remote roles by location. Job-posting data tell the same story from the other side: the share of remote postings that state a national, location-agnostic range has grown steadily, and city-specific ranges have become less common. The decline showed up earliest in engineering and product roles, the categories where remote hiring had been deepest.

The pendulum swung for reasons that had little to do with fairness and everything to do with friction. National bands were simpler to administer, easier to defend in audits, and more attractive to candidates. By 2024, remote candidates were scarce enough that employers stopped handing them reasons to look elsewhere. Indeed Hiring Lab data show remote postings, after peaking at about 10 percent of all U.S. job ads in early 2022, fell to roughly 6 percent by late 2025; companies kept remote roles but began pricing them like senior talent rather than like a cost-saving arbitrage.

Why the discount fell

"The discount was the first thing to go when companies started competing for remote workers again," said the consultant in Chicago, who has advised more than 60 technology companies and asked not to be identified. "You can defend a pay band. You cannot defend a ZIP code."

Public policy accelerated the move. The transparency laws that embarrassed the ZIP-code era also helped end it: a company posting a New York range and a Nashville range for the same remote role was putting an argument in writing that it would have to defend. Airbnb, which announced in 2022 that its U.S. employees would be paid the same regardless of where they lived, became a widely cited example of the alternative. Most employers did not copy Airbnb outright; they narrowed location pay to two tiers, coastal metros and everyone else, or dropped it for new hires only.

A quieter force was the return to the office. As companies required more in-person days, the remote workforce shrank and became more senior. The people still working remotely were often the ones companies most wanted to keep — workers with specialized skills and long tenure. Discounting their pay became harder to justify in a retention meeting. By 2026, SHRM surveys of employers showed location had fallen out of the top factors in setting remote pay, where it had sat three years earlier (shrm.org).

Who wins, who loses

For workers in low-cost cities, the shift is the largest pay change of their careers that did not require changing jobs. A remote employee in Tulsa or Boise on a national band is paid as if they lived in a major coastal market. The arithmetic is straightforward: a national band of $160,000 to $200,000 for a senior engineer, priced against a Tulsa market where the same role historically paid about $130,000, is a raise of 20 percent or more that no manager had to approve.

The table below shows the shape of the change for one role: how the two systems price the same job.

Illustrative pay for a senior software engineer, 2026, with a national remote band of $160,000 to $200,000

City	Local market median	2022 location-based offer	2026 national-band offer
San Francisco	$210,000	$210,000	$180,000
Austin	$175,000	$175,000	$180,000
Columbus	$150,000	$150,000	$180,000
Tulsa	$130,000	$130,000	$180,000

The gains are real but not evenly distributed. Workers who joined remotely during the ZIP-code era have seen their bands repriced upward. Workers in coastal cities who went remote have watched their local premium flatten: a designer in Seattle who took a remote role in 2023 at a 15 percent discount now earns the same as one in Des Moines. That is a fairness gain for Des Moines and a grievance for Seattle.

The new inequality is by position, not place. National bands help people who can walk: senior roles, scarce skills, candidates with competing offers. Entry-level remote roles remain the most likely to be localized, because the competition for them is local. The clearest winner is the mid-career worker in a low-cost city who negotiates — the market has moved in their favor for the first time in a generation.

The product manager in Tulsa can date the change precisely. In early 2025 her company adopted a national band, applied retroactive to the start of the year. Her February pay stub was 21 percent larger, with no explanation attached. She called the recruiter who had negotiated her original offer to make sure it was real. It was.

What hasn't changed

It would be a mistake to declare geographic pay dead. Hybrid and in-office roles are still priced locally, and because the return-to-office push has sent most white-collar workers back at least part of the week, most salaries are still set against local markets. A nurse in Pittsburgh and a nurse in Phoenix are paid against their local markets, and so is the accountant who comes in three days a week. Sales and field roles have always been local and remain so. Government pay scales, university systems, and union contracts still carry formal geographic adjustments. What has died, so far, is narrower: the remote-work discount as the default for distributed teams.

The academic evidence on remote pay is also more mixed than the headlines. Studies of large firms early in the remote era found that remote workers often earned less than comparable in-office colleagues — part location discounting, part flexibility traded for pay. Later work circulated through the National Bureau of Economic Research found that remote switchers, people who changed employers to work from home, captured wage gains, while remote stayers gave up some pay growth (nber.org). Economists have also documented a sorting effect: the workers most willing to take lower pay for remote work are often those with family obligations or a strong preference for where they live. The discount, in other words, was never purely geographic to begin with.

Even among employers on national bands, the practice is not uniform. Some pay a national band plus a small premium in the most expensive metros — a residue of the ZIP-code era, usually one tier instead of forty-three. Others set the national band at the old middle-market rate, quietly preserving a discount for everyone above the middle. And the transparency statutes now on the books in more than a dozen states mean the band is usually visible before the first interview. That visibility is a form of enforcement: a company that advertises a national band and then offers a Boise applicant 20 percent less has created a documentable discrepancy.

What to watch

What happens next depends on the labor market. If hiring stays competitive, national bands will hold, because they are the cheapest retention tool available. If the market loosens, the old discount will not return in its full form — the transparency laws and the pay-equity exposure make a return to 43-row spreadsheets unlikely — but employers will find quieter ways to price location, in starting offers and in the pace of raises. Watch whether companies begin localizing new hires while grandfathering tenured staff; that split, if it appears, will show up in the postings first.

For workers, the lesson is to treat the national band as the floor of the conversation, not the ceiling. The numbers are public now: the range is on the posting, national pay data is a search away, and Marketivate's salary calculators can show what a band means as an hourly rate, after inflation, or in a future year. A worker in a low-cost city who does not ask for the top of the band is leaving money the employer has already budgeted.

The spreadsheet with 43 rows still exists in some form at companies that never left the 2022 playbook. But it is no longer the default answer to a question the pandemic forced and the market has answered differently. For a generation, pay was a fact about where you lived. It is becoming a fact about what you do — a small change in how offers are written, and a large one in how careers are planned. For the worker in Tulsa, it has already landed, one pay stub at a time. The next chapter will be written in the postings, and it will be public.