In this chapter, we look at the different ways in which employees in colleges and universities are compensated for their labor. Understanding how people are paid is a crucial first step to conducting a pay equity analysis for them. The freedom that institutions have in setting pay has its advantages but also increases the chance that pay will appear to be inequitable. The chapter provides an overview of how three different groups of employees are compensated: tenure-eligible faculty, non-tenure eligible faculty, and non-faculty (staff). The chapter closes with information about different sources of data on pay in higher education, and the pros and cons of each.