The village of Banya is situated in a mountainous region. It lies in the Sredna Gora mountain, in the Bata-Banya valley. The river Banska Luda Yana runs through the village and flows into the Panagyurska Luda Yana downstream. The closest settlements are the town of Panagyurishte, which is the centre of the municipality at 11 km and the village of Bata at 5 km. Bukova Mogila Peak (974 m) is located to the south-west.