Does your organization pay fairly? At first glance, the numbers often look good. The problem is that fairness cannot be confirmed until you calculate the pay gap in comparable groups of positions, exactly as required by the Pay Transparency Directive. A low overall indicator can easily mask differences.
What the EU Pay Transparency Directive says
The pay gap is the difference between the average earnings of women and men, expressed as a percentage of men's earnings. This is not the same as unequal pay for the same job. It is a broader indicator that shows how women and men are distributed across different roles, levels, and pay components. The Directive defines 2 areas: transparency, meaning the right to information about pay levels and the criteria for their determination, and
How to calculate the pay gap - full transparency
The formula itself is simple, as it is based on the arithmetic mean and median. The catch is that "average pay" is not one obvious number. Almost every practical decision in this regard can shift the result by several percentage points. The EU regulation tells you what to measure, but leaves the detailed rules, i.e., what to include in the pay transparency calculation, and how to potentially correct it, to national law.
Average: difference in pay
The average gender pay gap is the difference between women and men, expressed as a percentage: (average pay for women - average pay for men divided by average pay for men). If men earn an average of PLN 30 per hour and women PLN 27, the gap is 10%. What constitutes "average pay" is defined: Article 3 includes not only basic pay but also complementary and variable components, such as bonuses, allowances, and benefits in kind. Article 9 requires separate
Median pay gap
The median is the middle pay: you line everyone up from lowest to highest earner and take the person in the middle, where half earn more and half earn less (Article 3). If the male median is PLN 28 per hour and the female median is PLN 25, the median gap is about 10.7%. The Directive requires it to be reported alongside the average, because the median is not skewed by a handful of very high earners. Here too, detailed rules are not up to the employer. Article 9 situates the figures within gross basic hourly or monthly pay, and the precise reference period and method for converting part-time work to full-time equivalent are determined by national implementation. The employer's task is to apply these national rules consistently, year after year, so that the figures are coherent and defensible.
Pay gap analysis: what indicators do you need to report
A pay gap report is not a single percentage. Article 9 requires a whole set of indicators, and the mean and median are just the beginning. In addition to these, you
What the Directive standardizes, and what your country decides
This distinction permeates the entire calculation. The Directive sets out concepts at a general level, and each Member State supplements operational details in its national law. A company operating in several countries cannot assume that one methodology will work everywhere. The table below shows where this line is drawn.
| Established by the Directive (uniform across the EU) | Decided by national law (varies by country) |
|---|---|
| Definitions of remuneration, pay gap, median, and quartile (Art. 3) | Exact reference period, e.g., one month or full year |
| List of indicators to |
Method of calculating working time, including full-time equivalent rules |
| Work of equal value and four criteria: skills, effort, responsibility, working conditions (Art. 4) | Method of treating remuneration for persons on parental leave or sick leave |
| 5% gap threshold triggering a joint assessment of the situation | Tool and channel for |
| The obligation to |
Exact thresholds, deadlines, sanctions, and monitoring and enforcement bodies |
In practice, this means that in each country of employment, you check the national implementation. The concepts will be consistent, but the number may vary. Tracking these national variations across borders is a separate task. This is precisely what PayGap's legislative monitoring is for, adapting the calculation to the regulations of each country so that an employer operating in multiple countries is compliant everywhere.
Common mistakes in calculating the pay gap
Most errors are not arithmetic. They concern incomplete data or lack of consistency. The first mistake is
Calculating the gap without job evaluation
The most serious mistake is made even before the calculation itself. The gap by categories of workers (Article 9) assumes the existence of these categories. Article 3 defines a category of workers as persons performing the same work or work of equal value, grouped according to gender-neutral criteria. These criteria, skills, effort, responsibility, and working conditions, come from the Directive's provisions on work of equal value (Article 4). This means that categories can only be built based on proper job evaluation. Calculating the gap without it gives a number that you can neither compare nor justify, because you have no objective basis to determine which positions are equivalent. Therefore, the order matters: first job descriptions and evaluation, then categories, and only then the pay gap. This is also the stage where most organizations need support. Proper preparation of job descriptions and gender-neutral evaluation is where a specialized consulting partner adds the most value. At Symmetria Partners, we build job architecture, categories of work of equal value, and a pay grid structure that makes your numbers defensible. We also conduct discussions with employees and trade unions. You can see how we do this in practice in our case study concerning a large public institution.
FAQ
How can the pay gap be resolved or reduced?
You reduce the pay gap by fixing its causes, not the overall indicator. It starts with understanding the sources of the gap through job evaluation and creating categories of work of equal value, and then by taking action: transparent pay ranges, consistent promotion rules so that women are not concentrated in lower quartiles, and fair distribution of bonuses, because the gap in variable components often fuels the overall difference.
What is the 40-40-20 split?
The 40-40-20 split is a gender balance model, not a requirement of the Directive. It assumes at least 40% women and 40% men at each level in an organization, with the remaining 20% open to any gender, as a practical goal on the path to balanced representation. It is relevant to salaries, because balance in each pay quartile is one of the mechanisms that helps close the gap. When one gender is concentrated in lower quartiles, the average pay gap increases, even if women and men in the same positions earn the same.
What factors influence the pay gap?
Most of the gap results from structure, not from directly paying men and women different rates for the same position. The main factors are occupational segregation, where women and men hold different positions; part-time work, more common among women, which changes the comparison of hourly rates; promotion and length of service, which is why the gap often increases with age; and bonuses, where differences in who receives variable components fuel the overall difference. This is precisely why the Directive requires several gap indicators, not just one, to make the causes visible.
What are the consequences of the pay gap?
The consequences are legal, financial, and reputational. Legally: an unexplained gap increases the risk of equal pay claims, and since the burden of proof rests with the employer, a gap of 5% or more in a given category can trigger a joint pay assessment with employee representatives. Financially: closing a confirmed gap means funding adjustments, which is much easier to manage when planned in advance. Reputational: pay gap data published or made available to employees shapes how current and future talent perceive the employer.
How to start implementing the directive
Calculating the pay gap is not a one-off report, but the end of a chain that begins with clear job descriptions and defensible, gender-neutral evaluation. This is what Symmetria Partners does: it builds job architecture, categories of work of equal value, and a compensation structure that makes your numbers explainable, and conducts discussions with employees and their representatives. The calculation itself, the full set of indicators from Article 9 and ongoing monitoring, is handled by PayGap, a platform created to identify, manage, and close pay gaps, which constantly tracks national regulations in each country. Together, consulting and software turn compliance obligations into a compensation system you can stand behind.
