The EU Pay Transparency Directive

From 2026, the EU Pay Transparency Directive will require employers across member states to open up about how they compensate staff. And while UK-only businesses aren’t directly in scope, the ripple effect is already starting to show.

Why? Because job seekers are demanding clarity. And because transparency is quickly becoming a hallmark of fair, inclusive workplaces.

What does the Directive actually cover?

If you’ve got operations in the EU, or are simply keeping pace with best practice, here’s what you need to know:

• Pay structures must be in place for ‘equal work or work of equal value’.
• Pay information (including salary ranges and progression opportunities) must be available before and during employment.
• Questions around candidates salary history will be prohibited during the recruitment process.
• Gender pay gaps must be reported by category of worker – not just across the company.
• Joint pay assessments are required if a 5%+ gender pay gap exists in any category.
• Enforcement measures shift the burden of proof, meaning it’s up to the employer to show no discrimination took place.

This will be a major shift in the way employers across the EU will attract and retain talent, and the UK isn’t immune.

What’s the UK angle?

While not bound by EU law, many UK employers will feel the pressure to align – especially those competing with EU-based talent or working with international clients. Some are already getting ahead by publishing pay bands in job adverts and analysing their own pay equity data.

And with gender, ethnicity and disability pay gap reporting on the rise in the UK (both voluntary and required), this is clearly the direction of travel.

What should you do now?

• Try reporting now to see where gaps might appear.
• Ensure your grading, pay bands, and job architecture are fair and up to date.
• Equip line managers and HR with the tools to explain how pay decisions are made.
• Ensure consistent application of pay decisions and reduce ‘one-off’ exceptions that can spiral.

Transparency brings risk but it also builds trust. And in today’s market, that trust is everything.