Preparing for the new rules in pay transparency

With the EU Pay Transparency Directive implementation deadline looming, Doone O’Doherty outlines how organisations can prepare for compliance

The European Union’s (EU) Pay Transparency Directive is reshaping how organisations approach pay equity, transparency and accountability.

With implementation deadlines fast approaching and national transpositions underway—all EU member states must have completed this by 7 June 2026—it’s time to assess your organisation’s readiness and take proactive steps toward compliance.

With the right approach, your organisation can build a more transparent, equitable workplace where fairness is more than a value.

Understand the key requirements

There are several key requirements of the EU Pay Transparency Directive that organisations must fully understand.

External gender pay gap reporting

Organisations must report on their gender pay gap annually or every three years, depending on their size. The report must include pay disparities by categories of workers performing the same work or work of equal value.

Internal equal pay assessment

Employers and employee representatives conduct this collective evaluation to analyse and identify pay disparities within an organisation.

If the external report reveals a pay gap of more than five percent in any category of worker that can’t be justified by objective, gender-neutral criteria, organisations must conduct a joint pay assessment to address the unjustified disparities.

Employee’s right to request

Employees can request information on average pay levels broken down by sex and worker category. Employers must provide this information within two months.

They must also ensure pay criteria are objective and gender neutral.

Recruitment pay transparency

Employers must disclose the starting salary or pay range for advertised positions in vacancy notices or ahead of interviews. They cannot ask candidates about their pay history.

Pay philosophy

Organisations should develop and communicate a clear pay philosophy that outlines their approach to compensation. This should include criteria for obtaining raises and promotions, as well as for career progression.

Worker compensation

Employers must ensure fair compensation practices, including addressing pay gaps and providing compensation in cases of pay discrimination.

Preparing for compliance

Organisations can take various steps to prepare for compliance with the EU Pay Transparency Directive before the implementation deadline.

1. Agree strategic principles

Embedding compliance with the directive into your organisation’s broader strategy ensures it supports long-term goals rather than acting as a standalone obligation.

The directive can be a powerful lever to drive operational efficiency, strengthen your brand and promote workplace equity. Take the opportunity to align compliance with your strategic priorities.

2. EU pay transparency readiness assessment

To ensure you’re prepared for compliance, identify priority gaps now. This includes assessing your data, policies, processes and technology.

3. Roadmap to compliance

A clear, structured plan is essential to ensure your organisation makes the right changes to meet the Directive’s requirements.

Doone O’Doherty is a Partner with PwC Ireland, leading employment tax and payroll solutions