How confident are you that your organisation pays fairly? On the surface the numbers often seem to agree, but fairness is hard to confirm until you calculate the gender pay gap across comparable jobs, exactly as the EU Pay Transparency Directive expects, because a low overall figure can quietly mask real differences. Below we walk through the formula and the figures the Directive requires, so you can check what your real position is.
Understanding the Gender Pay Gap and the EU Pay Transparency Directive
The gender pay gap is the difference between the average pay of women and men, expressed as a percentage of men's pay. It is not the same as unequal pay for the same job; it is a broader figure that reflects how women and men are spread across roles, levels and pay components. The EU Pay Transparency Directive (Directive (EU) 2023/970) is the set of rules that turns this figure from a voluntary statistic into a legal obligation, built on two pillars: transparency, meaning the right to know pay levels and the criteria behind them, and reporting of the gender pay gap. Its purpose is to enforce equal pay for the same work or work of equal value, which is why it does not let you rely on one number in isolation, but asks you to calculate the gap across comparable groups of jobs. Crucially, the Directive defines which figures you must report and what they mean, while leaving the precise rules for calculating them to each Member State's national law. That distinction matters, because the same company can report a slightly different gender pay gap in two EU countries while following the rules in both. Understanding this split, what is fixed across the EU and what your country decides, is the first step before you reach for any formula.
How to Calculate Your Gender Pay Gap: the Formula
The formula itself is trivial: the difference between the average pay of women and men, as a percentage of men's pay (Article 3 of the Directive), worked out for both the mean and the median that Article 9 requires. The catch is that "average pay" is not one obvious figure, and almost every practical decision behind it can move your result by several percentage points. The Directive tells you what to measure, but leaves the operational rules for how to measure it to national law, and that is where the number is really made.
Mean gender pay gap calculation, with a worked example
The mean gender pay gap is the difference between the average pay of women and men, expressed as a percentage of men's average pay (Article 3). The formula is (average male pay − average female pay) ÷ average male pay × 100, so if men earn on average 30 per hour and women 27, the gap is 10 percent. What actually goes into "average pay" is defined for you: Article 3 covers not only basic salary but complementary and variable components such as bonuses, allowances and benefits in kind, and Article 9 requires basic pay and variable components to be reported separately. Details that materially change the result, such as how pay is treated for someone on parental or sick leave, are then fixed by the national law transposing the Directive, which is why two countries can turn the same payroll into slightly different figures.
Median gender pay gap using the middle salary
The median is the middle salary: line everyone up from the lowest paid to the highest, and the median is the person in the middle, where half earn more and half earn less (Article 3). Comparing the middle woman with the middle man, if the median man earns 28 per hour and the median woman 25, the median gap is about 10.7 percent, and the Directive asks for it alongside the mean because it is not pulled upwards by a handful of very high earners. Here too the practical rules are not left to the employer: because pay has to be comparable, Article 9 frames the figures around the ordinary basic wage per hour or per month, while the precise reference period and the way part-time and full-time work are placed on a common basis are determined by national implementation. The employer's task is to follow those national rules and apply them the same way every year, so the figures stay consistent and defensible.
Your Gender Pay Gap Report: Which Figures You Must Include
The gender pay gap report is not a single percentage; Article 9 sets out a whole set of figures, and the mean and median we have just covered are only the start. Alongside them, you report the gap in complementary and variable components, such as bonuses, both as a mean and a median, and the proportion of women and men who receive those components at all, because who gets a bonus can matter as much as its size. You also report the share of women and men in each of the four quartile pay bands, the equal groups your workforce splits into from the lowest paid to the highest (Article 3), which shows whether one sex clusters at the bottom or the top. The most sensitive figure is the gap broken down by category of workers, reported separately for basic pay and for variable components (Article 9). Keep one distinction in mind: most of these figures are made public by the monitoring body, but the gap by category of workers is not published openly; it goes to your employees and their representatives, and, on request, to the labour inspectorate and the equality body. Producing this full set by hand, and keeping it consistent, is where dedicated software earns its place: a platform such as PayGap calculates every Article 9 indicator, including the sensitive breakdown by category of workers, and generates the employee-level reporting the Directive expects. Who has to report, and how often, depends on your headcount, and we cover that in our step-by-step implementation guide.
What the Directive Standardises and What Your Country Decides
This is the distinction that runs through the whole calculation. The Directive fixes the concepts and the outputs, while each Member State fills in the operational detail when it writes the Directive into national law, so a group operating in several countries cannot assume that one method travels across borders. The table below sums up where the line falls.
| Set by the Directive (the same across the EU) | Decided by national law (varies by country) |
|---|---|
| The definitions of pay, gender pay gap, median and quartile (Article 3) | The exact reference period, for example a snapshot month or a full year |
| The list of figures you must report (Article 9) | How working time is converted, including full-time-equivalent rules |
| Work of equal value and the four criteria: skills, effort, responsibility, working conditions (Article 4) | How pay is treated for people on parental or sick leave, paid or contractual |
| The 5 percent gap that triggers a joint pay assessment | The reporting tool and channel, for example a national statistics portal |
| The reporting duty itself and the rights to pay information | The precise thresholds, deadlines, penalties, and which bodies monitor and enforce |
In practice this means you check the national implementation in every country where you employ people: the concepts will match, but the number can move. Keeping track of those national variants across borders is a task in itself, and it is exactly what PayGap's legislation monitoring is built for, adapting the calculation to each country's rules so a multi-country employer stays compliant everywhere it operates.
Common Mistakes in the Gender Pay Gap Calculation
Most errors here are not about the arithmetic; they are about doing it incompletely or inconsistently. The first is reporting only the headline gap and skipping the rest, when Article 9 asks for the median, the variable components, the quartiles and the category breakdown, and an incomplete report is still a non-compliant one. The second is changing your method from one year to the next without writing it down, which leaves you unable to explain a movement in the figure, and unable to defend it once the burden of proof falls on the employer. The third is borrowing a familiar methodology from another country, such as the UK snapshot approach, and applying it to a report that has to follow your own national rules. The fourth is treating the headline number as the whole truth, when a low overall gap can hide real differences inside particular groups of jobs, which is exactly why the Directive asks for the gap by category of workers.
Calculating the gap using pay without job evaluation
The most serious mistake comes before the calculation even starts. The gap by category of workers (Article 9) depends on having categories in the first place, and Article 3 defines a category of workers as people doing the same work or work of equal value, grouped by gender-neutral criteria. Those criteria, skills, effort, responsibility and working conditions, come from the Directive's rules on work of equal value (Article 4), which means the categories can only be built on a proper job evaluation. Calculate the gap without it and you produce a number you can neither compare nor justify, because you have no objective basis for saying which roles are of equal value. That is why the order matters: job descriptions and evaluation first, categories next, and only then the gender pay gap. It is also the step where most organisations need help. Getting job descriptions and gender-neutral evaluation right is where a specialist consulting partner adds the most value: at Symmetria Partners we build the job architecture, the categories of equal value and the pay structure that make your figures defensible, and we guide the employee and union conversations that follow. You can see how we approached this for a large public institution in our case study.
FAQ
How can the gender pay gap be solved or reduced?
You reduce the gender pay gap by fixing its causes, not the headline number. That starts with understanding the reasons for your pay gap through job evaluation and categories of work of equal value, and then acting on them: transparent pay ranges, consistent progression so that women are not concentrated in the lower pay quartiles, and fair allocation of bonus pay, since a bonus pay gap often drives the overall difference in pay.
What is a 40-40-20 gender split?
The 40-40-20 gender split is a gender balance model, not a requirement of the EU Pay Transparency Directive. It aims for at least 40 percent women and 40 percent men at each level of seniority, with the remaining 20 percent open to any gender, as a practical target on the way to balanced representation. It matters for pay because balance across every pay quartile is one of the levers that helps close the gender pay gap: when one sex clusters in the lower quartiles, the average gender pay gap widens even where pay between men and women in the same role is equal.
What factors influence the gender pay gap?
Most of the gap is explained by structure rather than by paying a man and a woman differently for the same job. The main factors include occupational segregation, where women and men sit in different roles and pay quartiles; part-time work, which is more common among women and changes the hourly rate of pay comparison; progression and seniority, which is why the pay gap often increases with age; and bonus pay, where differences in who receives variable components feed the difference in pay. This is exactly why the Directive asks for several pay gap figures rather than one, so that the causes of the gender pay gap become visible.
What are the consequences of the gender pay gap?
The consequences are legal, financial and reputational. Legally, an unexplained gap raises the risk of equal pay claims, and because the burden of proof falls on the employer, a gap of 5 percent or more in a category can trigger a joint pay assessment with workers' representatives. Financially, closing a confirmed gap means funding pay corrections, which is far easier to manage when it is planned early. Reputationally, gender pay gap data that is published or shared with employees shapes how current and future talent see you, so the difference in pay becomes part of your employer brand.
Where to start
Calculating the gender pay gap is not a single report but the end of a chain that begins with clear job descriptions and a defensible, gender-neutral evaluation. That is the work Symmetria Partners does with you: building the job architecture, the categories of equal value and the pay structure that make your figures explainable, and guiding the conversations with employees and their representatives that follow. The calculation itself, the full set of Article 9 figures and the ongoing monitoring, is then carried by PayGap, a purpose-built platform that helps you identify, manage and close pay gaps while keeping pace with each country's national rules. Together, consulting and software turn a compliance obligation into a pay system you can stand behind.
