Despite the popularity of the concept of psychological equity as a principle of distributive justice, attempts to accommodate the assumptions of equity theorists within an algebraic formula have been the source of much controversy. In this article shortcomings with existing formulae are discussed, and a ratio equity formula is proposed, together with a supporting rationale. The formula describes ‘perfect equity’ such that it is possible to describe with some precision ‘degrees of inequity’, and a reanalysis of previous empirical data from Harris (1980) is presented as evidence for the practical utility of this