Gender pay gaps made understandable.

How to calculate gender pay gaps with practical methods.

Start Guide

Version 1.2 of the Gender Pay Gap Guide

Start anywhere, but dive deeper than just the headline number.

The real challenge for companies lies in explaining, correcting, and monitoring the pay system that produces those numbers.

Step 1

EU Pay Transparency Directive 2023/970

Start with the directive's framework, applicability, reporting thresholds, timelines, and national transposition caveats.

 Step 2

Reporting metrics under the Pay Transparency Directive

Mean gaps, median gaps, complementary or variable pay, recipient rates, quartiles, and an individual's right to information.

 Step 3

Data preparation

Gather a clean data set of employee information, pay components, and job evaluation.

 Step 4

Work of same and equal value

Define how groups of workers should be built using objective, gender-neutral criteria.

 Step 5

Unadjusted and adjusted gaps

Unadjusted gaps are the actual differences in pay, while adjusted gaps account for differences in job characteristics.

 Step 6

OLS regression for pay gaps

Statistical method for analyzing gender pay gaps and identifying contributing factors.

 Optional: Step 6.2

Oaxaca-Blinder decomposition

Provides a more detailed breakdown of the adjusted pay gap, separating explainable components (e.g., differences in job characteristics) and unexplained components.

 Step 7

Remediation

  • Route A: Fixing pay levels Correct deviations from gender-neutral pay standards for a specific role. Paying employees equally for same or equal-value work. This is the cleanest and easiest route.
  • Route B: Explaining the difference Where pay varies for roles of same or equal-value between men and women, companies need to statistically explain deviations using objective, gender-neutral variables.

Use the findings to choose the right response, then document and monitor the decision.