EU Pay Transparency Directive: what employers need to know

DIRECTIVE 2023/970

UPDATED MARCH 2026

The directive takes effect on 7 June 2026. This page covers the requirements, deadlines by company size, and what you should be doing right now.

Each section links to a detailed guide if you need to go deeper.

150+ employees in your company?
You have
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and the first reports are due

2 / 27
Countries transposed
as of today,

TL;DR

  • The EU Pay Transparency Directive requires all EU member states to pass national laws by 7 June 2026.
  • The directive applies to every employer in the EU. Reporting obligations kick in at 100+ employees.
  • Companies must disclose salary ranges in job postings, respond to employee pay information requests, and report gender pay gaps publicly.
  • If your pay gap exceeds 5% in any worker category and you can't justify it with objective criteria, you must conduct a joint pay assessment with worker representatives.
  • Reporting the gap is the easy part. Justifying it is where most companies get stuck, because justification requires linking pay decisions to documented performance data.
The complete guide → Deadlines & checklist → Performance data →
OVERVIEW

What is the EU Pay Transparency Directive?

Directive (EU) 2023/970 was adopted in April 2023 and published on 17 May 2023. It strengthens the principle of equal pay for equal work or work of equal value between men and women across all 27 EU member states.

The gender pay gap in the EU sits at roughly 12%-13%. The directive targets this gap through mandatory salary disclosure, public reporting, and a requirement that employers justify pay differences with objective, gender-neutral criteria.

It applies to all employers, public and private. The reporting obligations apply to companies with 100 or more employees, but the transparency measures (salary ranges in job postings, employee information rights) apply regardless of company size.

For a full breakdown of every requirement, including employee communication guidance and frequently asked questions, read our guide to the EU Pay Transparency Directive requirements and employer obligations.

TIMELINE

Key deadlines at a glance

7 June 2026 is when national laws take effect across all EU member states. From that date, salary transparency in recruitment, employee information rights, and pay structure requirements become legally enforceable.

7 June 2027 is when companies with 150 or more employees must submit their first gender pay gap report. The report covers 2026 payroll data, which means you need tracking in place from the moment the directive goes live.

7 June 2031 is when reporting extends to companies with 100 to 149 employees, covering 2030 payroll data.

Reporting frequency by company size

Company size First report due Frequency
250+ employees June 2027 Every year
150-249 employees June 2027 Every 3 years
100-149 employees June 2031 Every 3 years
Under 100 employees Not required Member states may extend

As of January 2026, only Belgium and Czechia have formally notified the European Commission of transposition measures. Most member states are still drafting or finalizing legislation.

For the full timeline from 2023 to 2031, a country-by-country transposition tracker, and a month-by-month compliance checklist, see our EU Pay Transparency Directive deadlines and compliance checklist.

TIMELINE

What employers must do

01

Salary transparency in recruitment

Employers must include a salary range in job postings or provide it before the first interview. Asking candidates about their salary history is banned. Job titles must use gender-neutral language.

Some competitors already publish salary ranges by default. Companies that don't will lose candidates to those that do, long before regulators come knocking.

02

Pay information rights for employees

Employees can request their individual pay level and the average pay for workers doing the same job, broken down by gender. Employers must respond within two months. Pay secrecy clauses are banned.

Employees are already asking these questions. The directive provides them with a legal mechanism to obtain answers.

03

Gender pay gap reporting

Companies above the reporting thresholds must report:

  • Gender pay gap (mean and median)
  • Gender pay gap in bonuses and variable pay
  • Proportion of men and women receiving bonuses
  • Distribution across pay quartiles
  • Gender pay gap by category of workers

Reports are submitted to your national monitoring body and are publicly available.

04

Joint pay assessment

If your report shows a gender pay gap of 5% or more in any worker category, you need to justify it with objective criteria. If you can't, you must conduct a joint pay assessment with worker representatives.

You have six months to act before the assessment becomes mandatory. This is where most companies struggle.

The real challenge

The compliance gap most companies miss

The question regulators will ask is not "Do you have a pay gap?" because most companies do. The question is, "Why does it exist?"

Article 4.3 of the directive lists what counts as a valid justification: skills, effort, responsibility, working conditions, and performance level. Notice that last one. Performance level is an acceptable reason for paying two people in the same role differently. But only if you can document it.

When someone asks, "Why does this person earn more than that person?" can you answer with documented data? Most companies end up digging through separate tools, inconsistent review records, and undocumented decisions.

A pay equity audit tool can calculate your gap. It can tell you that women in engineering earn 6% less than men. What it can't tell you is whether that gap correlates with performance ratings, OKR achievement, or differences in seniority. And that's what Article 4.3 requires.

The Littler survey number (24% feeling very prepared) makes more sense in this context. Running a pay gap report is not hard. Building the infrastructure to justify what the report reveals is the real work, and most organizations haven't started.

Action plan

How to prepare before June 2026

You don't need a 50-page compliance plan. You need five things done well, in roughly this order.

  1. 01

    Run a pay equity audit

    You can't fix what you haven't measured. Pull your compensation data, segment by gender and worker category, and flag every gap above 5%. Document whether each gap can be justified with objective criteria. The January section of our compliance checklist walks through it step by step.

  2. 02

    Update your recruitment process

    Every job posting needs a salary range. Interview guides need to drop salary history questions. Job titles need gender-neutral language. These changes apply to all employers from June 2026, regardless of size. See pre-employment transparency requirements.

  3. 03

    Connect compensation data to performance records

    When a gap shows up in your report, you'll need to explain it with documented evidence. Build that link now, not after a regulator asks. Read about the role of performance data in pay transparency compliance.

  4. 04

    Test your reporting systems

    Can your HRIS generate the required metrics? Run a dry report using 2025 data. If you're pulling numbers into a spreadsheet and reconciling manually, test that workflow under time pressure. Our March checklist section covers system readiness.

  5. 05

    Tell your people what's changing

    Hiring managers need to know about salary range disclosure. HR teams need a process for handling information requests. Employees need to understand their new rights. The earlier you communicate, the fewer surprises in June 2026. See our employee communication framework.

Each step has a detailed walkthrough. The directive requirements guide covers the what. The deadlines and compliance checklist covers the when. Start with whichever matches where you are right now.

How Mirro helps with EU pay transparency compliance

Compliance with this directive requires two things that most organizations keep in separate systems: compensation data for reporting and performance data for justification. Mirro is an HRIS that puts both in one place.

Gap analysis and reporting

Analyze gender pay gaps by role, department, and worker category. Break down pay quartiles and segment bonuses using live HRIS data. Eliminate exports, avoid spreadsheet reconciliation, and prevent version mismatches between systems.

Performance justification

When a gap exceeds 5%, Mirro shows performance context alongside compensation data. Ratings, OKR achievement, and competency assessments linked to salary records. The documented answer to "Why does this person earn more?" is already there.

Ongoing monitoring

Monitor pay gaps quarterly and conduct performance-adjusted analyses that track trends over time. Catch emerging gaps before they become audit findings. Respond to employee requests from one system instead of pulling data from four.

See how Mirro helps HR teams prepare
Go deeper

Further reading

Guide

The complete guide to the EU Pay Transparency Directive

Start here if you're new to the directive. Every requirement, a 6-step preparation framework, employee communication guidance, and frequently asked questions.

Read the guide →
Timeline

Deadlines 2026-2031 and compliance checklist

Full timeline from adoption to rollout. Country-by-country transposition tracker, deadlines by company size, and a month-by-month checklist for January through June 2026.

See the timeline →
Analysis

Why performance data is the missing link

The directive requires justifying pay gaps, not just reporting them. Why standalone audit tools fall short and how integrated performance data changes the equation.

Read the analysis →
Common questions

Frequently asked questions

  • Does the EU Pay Transparency Directive apply to non-EU companies?

    • If your company employs workers in the EU, it applies. The obligations follow the employee's location, not the employer's headquarters. A US-based company with 200 employees in Germany must comply with the German transposition of the directive. A UK company with a subsidiary in France must comply with the French version.

  • What is the difference between pay transparency and pay equity?

    • Pay transparency means disclosing pay information: salary ranges in job postings, gender pay gap reports, and the criteria behind pay decisions. Pay equity means ensuring equal pay for equal work. The directive targets both. Transparency is the mechanism. Equity is the goal. Transparency is the mechanism. Equity is the goal. You can be transparent about an unfair pay structure, but the directive requires you to justify every gap or close it.

  • Can we use Excel or basic HRIS tools to comply?

    • You can track salary data in Excel or a basic payroll system. For the reporting side alone, that might work. But the directive also requires justifying gaps above 5% using objective criteria such as performance level. A spreadsheet can't link a pay decision to a performance review. It can't segment gap analysis by performance quartile. And it can't respond to an employee information request with auditable, documented data within the two-month deadline.

  • What happens if our pay gap exceeds 5%?

    • A gap above 5% is not automatic non-compliance. If you can justify it with objective, gender-neutral criteria (documented performance differences, seniority, specialized skills), the gap is defensible. The problem is when you can't justify it. In that case, you must conduct a joint pay assessment with worker representatives, identify the causes, and develop corrective measures. The risk is not having a gap but not being able to explain it.

  • Where can I check my country's transposition status?

    • Our country-by-country transposition tracker covers all 27 EU member states with links to official government sources. It's updated monthly. As of January 2026, most countries are still drafting legislation, with only Belgium and Czechia having formally notified the European Commission.