From confusion to confidence.

Your practical guide to the EU Pay Transparency Directive

We’ve answered the 10 questions Reward Directors and HR leaders ask most.

What is the EU Pay Transparency Directive?

This is a European directive designed to make pay across Europe more transparent, consistent, and fair.

It requires companies with 100+ employees to:

Disclose gender pay gap data
Explain how salaries and promotions are determined
Use objective, gender-neutral criteria in pay decisions

The Directive was adopted in 2023. By 2026, all EU countries must implement it into national law, which is why preparation is critical now.

Explore the Top 10 FAQs

Your Top 10 questions, Answered

Our FAQ hub turns the Directive into clear, practical steps. From salary ranges to statistical methods, find straight answers you can act on.

Understanding the rules

What is pay transparency, and what does it require under the EU Directive?

Disclose salary ranges and criteria, report gender pay gaps, and base decisions on objective, gender-neutral factors. Start aligning policies, data and processes.

Which employees are included in the scope of the Directive?

Covers most workers (full-time, part-time, fixed-term, agency). Genuine self-employed are out of scope. Reporting applies at employer level.

What counts as “pay” under the Directive?

All remuneration: base pay, bonuses, overtime, allowances, benefits-in-kind and any other monetary advantage provided by the employer.

How should companies calculate gender pay gaps?

Use the standard EU methods (mean/median) and compare like-for-like groups. Check your data and note how you calculated it.

What does “equal work of equal value” mean, and how do we define it?

Compare roles using objective, gender-neutral criteria like skills, effort, responsibility and working conditions, rather than job titles.

What is a “category of workers,” and how should we define it for reporting?

Group similar jobs in a fair, consistent way. Keep categories steady over time and explain clearly how you’ve defined them.

What’s the minimum sample size for pay gap reporting, and what if we don’t meet it?

If a group is too small to protect privacy, combine it with similar roles or explain why you can’t publish a figure.

Can we still negotiate individual salaries under the pay transparency rules?

Yes - within published ranges and clear criteria. Record why decisions are made so that they’re fair and consistent.

How can companies address pay gaps without disrupting internal morale?

Share the ‘why’ before the numbers. Phase changes, protect privacy, and equip managers with talking points. Small, fair steps build trust.

How can HR balance pay transparency with employee privacy?

Share information in groups, not for individuals. Use minimum group sizes to protect privacy, and explain clearly why some data can’t be shown.

“Don’t wait for enforcement to start preparing. Getting ahead of the deadlines will not only reduce your compliance risk, but also strengthen internal trust, support your DEI strategy, and help position your company as a fair and forward-thinking employer.”

— Pieter-Jan Boden, People Director, SD Worx

Watch how SD Worx is getting ready

At SD Worx, we’re not waiting until the last minute. We’re already adapting our recruitment, reporting, and reward processes - and we’re sharing our journey so you can learn from it, too.

Key reporting deadlines by company size

See when reporting starts for your organisation - and how often you’ll need to submit.

employees

report every 3 years starting 2027

report every 3 years starting 2031

no EU requirement (local rules may apply)

Learn More with the Top 10 FAQs

SD Worx. Your European HR & Payroll partner

With over 10,000 HR professionals based in 26 locations across Europe covering a global network of 120+ countries, SD Worx delivers fully integrated solutions that scale with you across all aspects of HR, from payroll and reward to human capital management and workforce management.

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