The EU Pay Transparency Directive (Directive (EU) 2023/970) was adopted in 2023, and EU countries were required to bring it into national law by 7 June 2026. Most missed that date. As of August 2026, only five had fully transposed it: Slovakia, Lithuania, Italy, Malta and Greece. The European Commission has said there will be no EU-level pause or extension, so the rules are coming, country by country.

For employers, the Directive means explaining how pay is set, answering questions about it and reporting on gender pay gaps. Almost all of that depends on software. If you're building HR, pay or reward software, this is what your product needs to do.

Each requirement below names the article of the Directive it comes from, followed by a checklist you can use with your product team.

  1. 01

    Show pay ranges before the job interview

    Under Article 5, job applicants have the right to know the starting pay, or its range, before the interview. The range must be based on objective, gender-neutral criteria. Employers can no longer ask applicants about their pay history.

    • Store a pay range against every role or grade
    • Pass ranges to job adverts, recruitment tools or offer letters
    • Remove salary history questions from application forms and recruitment workflows
  2. 02

    Make pay-setting and progression criteria easy to find

    Article 6 requires employers to make the criteria used to set pay, pay levels and pay progression easily accessible to workers. Member states can exempt employers with fewer than 50 workers from the pay progression part.

    • Hold the criteria behind each grade or pay level, written in plain language
    • Give employees a view of the criteria that apply to them
    • Keep a dated version history, so you can show what applied and when
  3. 03

    Group roles by equal work and work of equal value

    Article 4 requires pay structures that make sure equal work, or work of equal value, gets equal pay. Roles are compared using objective, gender-neutral criteria, including skills, effort, responsibility and working conditions. Almost every other requirement depends on these groupings, which the Directive calls categories of workers.

    • Evaluate or classify roles against defined, gender-neutral criteria
    • Group roles into categories of workers doing the same work or work of equal value
    • Record the reasoning behind each evaluation, not just the outcome
  4. 04

    Answer pay information requests within two months

    Article 7 gives workers the right to ask for their own pay level and the average pay levels, broken down by sex, for the category of workers doing the same work or work of equal value. Employers must respond within two months at the latest, and tell all workers about this right every year. Workers can't be stopped from disclosing their own pay to enforce equal pay.

    • Log requests and track the two-month deadline
    • Generate the response: individual pay level plus average pay by sex for the worker's category
    • Prompt the annual notice to all workers about their right to ask
    • Handle small categories carefully, where averages could reveal an individual's pay
  5. 05

    Capture every component of pay, not just salary

    Article 3 defines pay as basic salary plus any other consideration, in cash or in kind. That includes complementary or variable components such as bonuses, overtime, travel facilities, housing and food allowances, training compensation, dismissal payments, statutory sick pay and occupational pensions.

    • Hold basic pay and each complementary or variable component separately
    • Map payroll and benefits data into those components consistently
    • Let reports include or separate variable pay, since the Directive measures both
  6. 06

    Produce the seven gender pay gap indicators

    Article 9 sets out the indicators employers must report: the mean and median gender pay gap, the mean and median gap in complementary or variable components, the proportion of women and men receiving those components, the proportion of women and men in each quartile pay band, and the gender pay gap by category of workers. Employers with 250 or more workers report by 7 June 2027 and every year after. Those with 150 to 249 workers report by 7 June 2027 and every three years after. Those with 100 to 149 report by 7 June 2031 and every three years after.

    • Calculate all seven indicators from the same data used for pay decisions
    • Break down gaps by category of workers, by basic pay and by variable pay
    • Support annual and three-yearly reporting cycles based on employer size
  7. 07

    Flag gaps of 5% or more before they become a joint pay assessment

    Under Article 10, if reporting shows a gap of at least 5% in average pay between women and men in any category of workers, and the employer can't justify it on objective, gender-neutral grounds or fix it within six months, they must carry out a joint pay assessment with worker representatives.

    • Flag categories where the gap reaches 5% or more
    • Let employers record the objective reasons behind a gap, or the action taken to close it
    • Track the six-month window to put things right
  8. 08

    Keep a record of how pay decisions were made

    The Directive asks employers to explain pay with objective, gender-neutral reasons. Article 9 also lets labour inspectorates and equality bodies ask for reporting information from the previous four years, where available. That only works if the history is kept.

    • Record who evaluated or changed a role or pay level, when and why
    • Keep at least four years of pay and reporting history
    • Make it easy to export evidence for an inspector or tribunal
  9. 09

    Allow for different rules in each country

    Employers' duties come from national law, not the Directive itself. Countries are transposing it at different speeds, and the Directive sets a minimum, so national laws can go further. A product used across the EU can't assume one rulebook.

    • Make thresholds, deadlines and reporting formats configurable by country
    • Track which rules apply to each entity and location
    • Plan for rules to change as countries finalise their laws

What this means for UK businesses

The Directive doesn't apply in Great Britain, which has its own gender pay gap reporting for employers with 250 or more employees. But a UK business that employs people in EU countries will need to meet those countries' rules for those staff, and HR software sold into the EU will need to support them.

The bottom line

Pay transparency turns pay data into evidence. Employers will need to show how roles were valued, why people are paid what they are, and what they're doing about gaps. Software that keeps that evidence as part of everyday work, rather than rebuilding it from spreadsheets each year, will be the software reward teams choose.

If you're working on pay transparency features in HR software, I'd like to hear how you're approaching them. Get in touch.

This checklist is a product guide, not legal advice. Check the national law that applies to each employer.

Sources