The EU Pay Transparency Directive explained

What is the EU Pay Transparency Directive?

The Pay Transparency Directive (Directive (EU) 2023/970) was adopted on 10 May 2023 and entered into force on 6 June 2023. It requires employers to be open about pay and pay progression, gives workers the right to compare pay, and introduces gender pay gap reporting. EU Member States must transpose it into national law by 7 June 2026, and national rules may go further than the minimum standard set out in the Directive.

Who does it apply to?

The pay transparency and equal-pay rules apply to employers in both the public and private sectors, and to all workers with a contract of employment or an employment relationship as defined by national law. Some obligations are scaled by headcount: gender pay gap reporting applies to larger employers first, while measures such as pay information for candidates apply regardless of company size. Member States may exempt employers with fewer than 50 workers from some pay-progression transparency duties.

Pay transparency in recruitment

Before an employment relationship begins, applicants have the right to receive information about the starting salary or its range for the position. This can be published in the job advertisement or provided before the interview. Employers may not ask candidates about their pay history, and job titles, advertisements and selection processes must be gender-neutral. These rules aim to stop existing pay gaps from being carried forward into new roles.

Rights for current employees

Workers can request information about their individual pay level and the average pay levels, broken down by sex, for categories of workers doing the same work or work of equal value. Employers must tell workers about this right each year. The criteria used to set pay, pay levels and pay progression must be objective, gender-neutral and — for larger employers — easily accessible. Pay secrecy clauses that prevent workers from disclosing their pay are not permitted.

Gender pay gap reporting

Larger employers must report on the pay gap between female and male workers, including the gap in complementary or variable components and the gap by categories of workers. The first reports are phased in by company size, with the largest employers reporting first and most frequently. Reporting gives employees, employee representatives and enforcement authorities the data needed to identify and address unjustified pay differences.

See the full reporting bands and deadlines

Joint pay assessments

Where reporting shows a difference in average pay between female and male workers of at least 5% in any category of workers that cannot be justified by objective, gender-neutral criteria — and the employer has not corrected it within six months — the employer must carry out a joint pay assessment together with workers' representatives. The assessment analyses the causes of the gap and sets out measures to close it.

How employers can prepare

Preparation takes time because it touches job architecture, HR data and recruitment practices. Practical first steps include:

• Group roles into categories of equal work or work of equal value using objective criteria such as skills, effort, responsibility and working conditions.
• Review job advertisements and interview processes to remove pay-history questions and add pay ranges.
• Check whether your pay-setting and pay-progression criteria are documented, objective and gender-neutral.
• Estimate your gender pay gap early so there is time to understand and address any differences before the first report.

Download the free readiness checklist (PDF)

See also: Equal value · Glossary · FAQ · Methodology