Gender pay gaps made understandable.

How to calculate gender pay gaps with practical methods.

Start Guide

Version 1.2 of the Gender Pay Gap Guide

Start anywhere, but dive deeper than just the headline number.

The real challenge for companies lies in explaining, correcting, and monitoring the pay system that produces those numbers.

Step 1

EU Pay Transparency Directive 2023/970

Start with the directive's framework, applicability, reporting thresholds, timelines, and national transposition caveats.

 Step 2

Reporting metrics under the Pay Transparency Directive

Mean gaps, median gaps, complementary or variable pay, recipient rates, quartiles, and an individual's right to information.

 Step 3

Data preparation

Gather a clean data set of employee information, pay components, and job evaluation.

 Step 4

Work of same and equal value

Define how groups of workers should be built using objective, gender-neutral criteria.

 Step 5

Unadjusted and adjusted gaps

Unadjusted gaps are the actual differences in pay, while adjusted gaps account for differences in job characteristics.

 Step 6

OLS regression for pay gaps

Statistical method for analyzing gender pay gaps and identifying contributing factors.

 Optional: Step 6.2

Oaxaca-Blinder decomposition

Provides a more detailed breakdown of the adjusted pay gap, separating explainable components (e.g., differences in job characteristics) and unexplained components.

 Step 7

Remediation

  • Pay philosophy Decide what pay variation the company is prepared to allow, from equality by design to explainable variation.
  • Decision path Correct unjustified pay differences, document objective explanations, and identify structural causes.
  • Action plan Turn the finding into pay actions, process actions, governance, and monitoring.

Use the findings to correct pay where needed, fix the processes that created the gap, and monitor whether the response works.