Update note: This article was updated on March 12, 2026, with a revised introduction, links to our EU Pay Transparency Directive resource center, and updated guidance on integrating performance management with pay transparency compliance.

The EU Pay Transparency Directive (2023/970) creates specific obligations for every employer operating in the EU. Starting 7 June 2026, you must disclose salary ranges in job postings, respond to employee pay information requests, and report gender pay gap data on a regular cycle if your company has 100 or more employees.

This article breaks down each requirement: what you must do before hiring, what changes during employment, when reporting kicks in, and what triggers a joint pay assessment. It also covers employee rights, internal communication, and answers to the most common questions from HR and compliance teams.

This guide is part of Mirro's EU Pay Transparency Directive resource center, where you'll find compliance timelines, preparation checklists, and guidance for every stage of implementation.

What is the EU pay transparency directive?

The Pay Transparency Directive strengthens the application of the principle of equal pay for equal work or work of equal value between men and women. It establishes minimum requirements across all EU member states, focusing on:

Pay transparency measures before and during employment;
Mandatory reporting obligations for larger employers;
Enforcement mechanisms to protect workers' rights;
Remedies and penalties for non-compliance.

Key timeline

7 June 2026: Member states must transpose the directive into national law. Transparency obligations become enforceable from this date.
7 June 2027: First gender pay gap reports due for companies with 150+ employees, covering 2026 payroll data.
7 June 2031: Companies with 100–149 employees must submit their first reports.

For the complete timeline from 2023 to 2031, a country-by-country transposition tracker, and deadlines broken down by company size, see our EU Pay Transparency Directive deadlines and compliance checklist.

Main points of the EU directive

1. Pay transparency before employment

✅ What employers must do:

Provide information about the initial pay or its range for advertised positions: Article 5;
Share relevant collective agreement provisions;
Ensure job vacancy notices and titles are gender-neutral;
Conduct recruitment processes in a non-discriminatory manner.

❌ What employers can’t do:

Ask candidates about their current or previous salary history;
Include discriminatory language in job postings.

2. Transparency during employment

The right to information on pay (Article 7): Employees can request and must receive:

Their individual pay level;
Average pay levels (aggregated, not individual salaries) broken down by sex for workers performing the same work or work of equal value.

Pay structure requirements (Article 6): Employers must:

Make pay criteria easily accessible to workers;
Explain how pay levels and pay progression are determined;
Use objective, gender-neutral criteria;
Provide the information requested by the employee in a timely manner;
Not prevent employees from disclosing their own remuneration;
Inform workers of their rights to pay transparency (communication frequency may vary depending on national implementation).

3. Pay gap reporting obligations

Companies must report specific gender pay gap data based on their size (Article 9):

Company Size	Reporting Frequency	First Deadline
250+ employees	Annually	7 June 2027
150-249 employees	Every 3 years	7 June 2027 - EU sets a minimum frequency but not a fixed first deadline
100-149 employees	Every 3 years	7 June 2031 - To be confirmed by national legislation; the directive foresees phased inclusion but does not mandate this exact date

Required data includes:

Gender pay gap (average and median);
Gender pay gap in complementary/variable components;
Proportion of female and male workers receiving complementary or variable components;
Proportion of female and male workers in each pay quartile;
Gender pay gap by category of workers.

4. Joint pay assessment (Article 10)

If a company's pay reporting shows a gender pay gap of 5% or more in any worker category that cannot be justified by objective, gender-neutral criteria, and the gap is not remedied within six months of the report, employers must conduct a joint pay assessment with workers' representatives.

This assessment must:

Identify and analyze pay differences;
Determine the reasons for gaps; this is where Mirro can help by providing performance data analysis.
Develop measures to address unjustified differences;
Evaluate the effectiveness of previous measures.

Benefits of the directive

For employees

Greater transparency into pay structures and criteria;
Protected rights to request pay information without retaliation;
Enhanced legal protections with shifted burden of proof to employers;
Reduced gender-based discrimination through objective pay criteria;
Career clarity with visible progression opportunities.

For employers

Proactive compliance by identifying issues early;
Improved talent attraction through transparent practices;
Enhanced reputation as a fair and equitable employer;
Reduced legal risks with clear documentation;
Better workforce engagement through trust and transparency.

For society

Closes the gender pay gap across the EU;
Promotes equality in the workplace;
Includes a reference to intersectional discrimination, encouraging member states to consider overlapping forms of disadvantage;
Sets global standards for pay transparency;
Economic benefits through reduced poverty and pension gaps.

How to prepare for the EU Pay Transparency directive

Compliance requires work across four areas, and you should be moving on all of them now if you haven't started.

Audit your current pay landscape. Pull compensation data across all EU entities, segment by gender and worker category, and flag every gap above 5%. Gaps that exist when the directive takes effect will show up in your first public report.
In Mirro's March 2026 readiness study, roughly half of the companies interviewed had not yet formalized their job architecture, and none reported a fully integrated system linking compensation to performance data.
Update recruitment and pay policies. Every job posting needs a salary range. Interview processes need to drop salary history questions. Pay progression criteria need to be documented, objective, and accessible to employees. These rules apply to all employers from June 2026, regardless of size.
Connect compensation to performance data. The directive doesn't just ask whether gaps exist, it asks why. Article 4.4 lists the criteria for assessing equal value: skills, effort, responsibility, and working conditions, plus any other factors relevant to the specific role. Performance may qualify under that last category, but only if documented objectively. If your performance management system lives in a separate tool from your compensation data, you'll struggle to make that connection when a regulator or employee representative asks for it. Standalone audit tools identify gaps but can't justify them. Mirro connects compensation data, performance reviews, objectives, and engagement insights in one system, so you build the documented evidence trail that justifies your pay decisions as part of your regular workflow.
Read our article about the key role of performance data which provides both gap analysis and performance justification.
Build reporting infrastructure and train your team. If you have an HRIS in place, test it to see whether it generates the required metrics. Run a dry report using last year's data. Train hiring managers on salary range disclosure and HR teams on handling pay information requests. Employees can request pay information starting June 2026, and you have two months to respond. Build and test that workflow before the deadline.

For the month-by-month compliance checklist covering January through June 2026, with action items and common pitfalls for each stage, see our EU Pay Transparency Directive deadlines and compliance checklist.

How to communicate with employees

Under Article 7(3) of the Pay Transparency Directive (EU) 2023/970, employers must inform all workers, on an annual basis, of their right to request information on their individual pay level and the average pay levels broken down by sex for categories of workers performing the same work or work of equal value. Also, companies need to explain the steps employees need to take to exercise that right.

As a result, employers will need to develop an internal communication plan and clear policies for resolving complaints of pay discrimination. Here's how to approach it:

Key messages to convey

The "why": frame the directive as a positive step toward fairness:

"Our commitment to pay equity aligns with our values of fairness and inclusion."
"This directive helps ensure everyone is compensated fairly for their contributions."
"Transparency builds trust and strengthens our workplace culture."

What's changing: be specific about new practices:

Job postings will include salary ranges;
Employees can request pay information for comparable roles;
Regular reporting will track our progress on pay equity;
Pay decisions will be based on documented, objective criteria.

Employee rights: clearly communicate new protections:

Right to receive pay range information before interviews;
Right to request information about pay levels by gender;
Protection against retaliation for discussing pay;
Access to remedies if discrimination occurs.

Communication channels

All-hands meetings: Announce changes organization-wide;
Manager briefings: Equip leaders to answer questions;
Written materials: Provide detailed FAQs and policy documents;
One-on-one conversations: Address individual concerns in 1:1s;
Communication platform: Use a platform like Mirro that combines employee communication with the compensation and performance data behind the changes. When employees ask follow-up questions about pay criteria, the answers are available in the same system rather than scattered across spreadsheets.

Sample communication timeline

12 months before deadline:

Initial announcement about upcoming changes
Town hall explaining the directive and its benefits

9 months before deadline:

Detailed policy rollout
Manager training completion

6 months before deadline:

Employee training sessions
Launch of information request process

3 months before deadline:

Reminder of new rights and resources
Feedback collection and Q&A sessions

At deadline:

Celebration of compliance achievement
First transparency report (if applicable)

Addressing concerns

The announcement of the new EU directive will likely raise concerns and many questions among your people. Here are the most common questions we anticipate and how to address them properly:

"Will this lead to pay increases for everyone?" Explain that the directive ensures fairness, not automatic raises. Pay will be based on objective criteria like skills, experience, and performance.

"What if I find out I'm paid less than others?" Emphasize the process for raising concerns and your commitment to addressing unjustified differences.

"How will this affect hiring?" Clarify that transparency attracts stronger candidates who value fairness and helps streamline negotiations.

Wrapping up

The EU Pay Transparency Directive is a transformative step toward workplace equality and can be a turning point for leaders to build fair, transparent, and data-driven processes.

Organizations that approach this proactively, treating it as an opportunity rather than an obligation, will gain a competitive advantage in attracting and retaining top talent.

Start preparing now. With clear deadlines approaching and meaningful work required, early action ensures smoother implementation and demonstrates a genuine commitment to pay equity.

Does the directive apply to all companies?

The directive applies to all employers in the public and private sectors across EU member states. However, reporting obligations only apply to companies with 100+ employees.

When do companies need to comply?

Member states must transpose the directive into national law by 7 June 2026. Companies should prepare now, as reporting begins in 2027 for larger employers. For deadlines by company size and an overview of every obligation, see our EU pay transparency hub.

What is the penalty for non-compliance?

Member states must establish effective, proportionate, and dissuasive penalties, including fines. Specific penalties will vary by country but must guarantee a real deterrent effect.

What information needs to be reported?

Companies must report gender pay gaps (average and median), pay gaps in bonuses, proportion of workers receiving bonuses, and distribution across pay quartiles, broken down by categories of workers.

Who will see this information?

Pay reporting data will be shared with designated monitoring bodies and published publicly. Member states will compile and publish this data in an easily accessible format.

What if our gender pay gap exceeds 5%?

You must either justify the gap using objective, gender-neutral criteria or conduct a joint pay assessment with workers' representatives to identify causes and remedial measures. See our article about the key role of performance data and learn about a tool that makes justification possible.

Can employees really ask about others' salaries?

Employees can request average pay levels broken down by sex for categories of workers doing the same or equal-value work. Individual salaries remain confidential, but average data must be provided.

What if we have confidentiality clauses in contracts?

The directive prohibits contractual terms that restrict workers from disclosing their own pay for the purpose of enforcing equal pay principles.

How long do employers have to respond to information requests?

Employers must provide requested information within a reasonable period, but no later than two months from the date of the request.

What is a joint pay assessment?

It's a collaborative process between employers and workers' representatives to analyze pay differences, identify root causes, and develop corrective measures when gaps exceed 5%.

Who are "workers' representatives"?

These are defined according to national law and practice, typically including trade unions, works councils, or representatives designated by workers specifically for this purpose.

How often must joint pay assessments be conducted?

Only when triggered by reporting that shows an unjustified pay gap of 5% or more that hasn't been remedied within six months.

How do we protect employee privacy while being transparent?

The directive allows member states to limit disclosure where it would reveal identifiable individual pay. Workers' representatives or equality bodies can access such data and advise workers without disclosing specific salaries.

What about GDPR compliance?

All data processing under the directive must comply with GDPR. Personal data should only be used for applying the principle of equal pay.

EU Pay Transparency Directive requirements: obligations, employee rights, and how to comply