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Salaries in 2025
In the modern workplace, everyone should be rewarded fairly based on their performance, position, and abilities. Gender or other biases should never play a role in determining pay rates. Likewise, employees and job seekers should be aware of the processes companies use to make pay decisions, Unfortunately, this isn’t always the case.
To help achieve pay equity between men and women and encourage openness and fairness, the European Council has recently introduced the new EU Pay Transparency Directive, which will go into effect on the 1st of June 2026.
The regulation requires companies to adopt new salary reporting procedures. Companies will also have to ensure complete salary transparency in job advertisements and be upfront about employee progression pathways.
As of June 2026, all employers in the European Union (EU) will be required to comply with the Pay Transparency Directive. Rather than another administrative burden, the requirement for increased pay transparency can benefit employers, employees, and potential employees alike. The directive provides you with an opportunity to modernise your business practices, build trust with your people, help close the gender pay gap, and enhance the reputation of your company.
But organisational change can take time. By developing new processes and internal reports now, you can ensure you stay on top of the new regulations. In this article, we take a closer look at the new EU pay transparency directive and explain how you can prepare for the coming changes.
In simple terms, pay transparency involves being open to employees and potential job candidates about your company's salary rates and compensation packages. It includes disclosing information about salary ranges, individual rates, and factors that influence pay decisions, such as experience or performance. Adopting transparency strategies builds trust and reduces unfair wage gaps between men and women.
Right now, the lack of pay transparency is negatively impacting gender parity in EU workplaces. A 2022 EU Commission factsheet reported that the gender pay gap in the EU is currently sitting at 13%. According to the report, women earn an average of 0.87€ for every 1€ that men earn. This disparity means that, in effect, women stop being paid for their work halfway through each October.
To help raise awareness about the issue of salary disparities between men and women, 12 EU countries have an annual Equal Pay Day that marks the point when female employees stop receiving payment compared to men.
Despite efforts to minimise disparities, the gender pay gap has only decreased by 2.8% in ten years across the EU. To better address the problem, the EU Council released a pay transparency proposal in March 2021. This eventually led to the creation of the Pay Transparency Directive in 2023. The EU Pay Transparency Directive will take effect on 7 June 2026.
“Equal work deserves equal pay. And for equal pay, you need transparency. Women must know whether their employers treat them fairly. And when this is not the case, they must have the power to fight back and get what they deserve.” Ursula von der Leyen, President of the European Commission.
“Equal work deserves equal pay. And for equal pay, you need transparency. Women must know whether their employers treat them fairly. And when this is not the case, they must have the power to fight back and get what they deserve.”
Ursula von der Leyen, President of the European Commission.
Almost every business in the EU will have to adhere to the EU Pay Transparency Directive. It applies to both private and public entities based in or operating in the EU.
So, how will these regulations impact your business? Firstly, you’ll need to provide more details about salaries. The new law requires that companies inform job applicants of the expected pay and compensation pre-employment. Existing employees and exiting employees also have the right to be informed about their salaries.
Beyond this, there are a range of key compliance requirements employers should prepare for:
Non-compliance may result in penalties, making it crucial to take proactive steps to avoid fines, legal fees, and potential loss of business opportunities.
In the next section, we look at the implications of these requirements and explain how you can prepare for them.
The new law certainly does have noble ambitions and a range of benefits, but who does it apply to? If you have a medium to large business that operates in the EU, there’s a good chance you’ll need to comply with the regulations.
EU companies and those operating within the EU with over 100 employees will be encouraged to explore whether pay gaps exist between men and women. Larger organisations with more than 250 employees will be expected to prepare annual gender pay gap reports for the relevant authorities. For companies with 150 to 249 employees, reports will be prepared every three years. Companies with fewer than 100 employees are exempt from mandatory reporting requirements.
Although it will increase your responsibilities as an employer, the EU Pay Transparency Directive provides a range of benefits and opportunities, such as:
Sharing salary information and gender pay reports builds trust in the workplace. It boosts employee engagement and makes it easier to keep track of progress and challenges. Transparency proves to employees that your company values openness and is actively addressing pay equity.
Have you considered how pay transparency might improve your hiring process? According to our Talent Trends study, 62% of candidates consider salary to be the most important detail in a job advertisement.
Disclosing pay ranges on job vacancy adverts attracts candidates that align with expectations. Lack of disclosure attracts a wider range of candidates, not all of whom might be a good fit. Being upfront about salaries cuts down on the hiring process and ensures that everyone who applies for the position knows exactly what to expect.
Using clear, gender-neutral criteria boosts employee satisfaction by promoting fairness and equality. People tend to feel more confident and valued when pay progression for equal work is based on transparent rules rather than vague or inconsistent standards.
Everyone should be given the chance to succeed, regardless of their gender, background or physicality. The directive can help you to create a more diverse and inclusive workplace. It supports the rights of workers with disabilities, women, and other underrepresented groups by pushing for equal opportunities. You can develop clearer policies, provide better representation, and build a company culture that values everyone's contributions.
Have you thought about the benefits of removing pay anonymity? The new law makes salary negotiations fairer and simpler. Both hiring managers and candidates can discuss pay with a clear understanding of expectations. This levels the playing field and helps avoid misunderstandings during the hiring process.
Ever thought about how transparency can help keep your pay structures fair and accountable? It ensures everyone is on the same page, building trust and ensuring consistency in how salaries are set and managed. With regular audits, you can check for any gaps and make sure steps like joint pay assessments are taken to fix them. Any issues can be spotted and addressed quickly.
Let’s say your company fits the criteria, what will you have to do to stay on the right side of the new regulations? We understand compliance can feel daunting, but there are steps you can take to simplify the process. Here are the main actions that your company will need to take to comply:
Going forward, you are going to have to be completely upfront with job candidates. It’s a good idea to start including salary ranges in your job ads now. Studies show that transparency can lead to more applications, and it’s also a good way to get ahead of the upcoming regulations. Think of this as an opportunity to stand out – providing salary ranges in job offers can give you a real competitive advantage.
Once the new directive is in place, average pay or salary ranges will be shown in employment advertisements. This pay range needs to be reasonable and fair. For example: ‘The salary for this role ranges between €45,000–€50,000 depending on experience.’
Of course, some companies might not be quite ready to make this change. You may need to spend time defining clear salary ranges before sharing this information publicly. The solution is to create a well-structured salary policy so you can approach this requirement confidently when the time comes. Our salary guides give you detailed information on salary scales by profession, experience, and location. This information can help you to benchmark and set fair, transparent salary policies that are fully aligned with market expectations.
And there will be no more ads for the ‘right man for the job’. Employers will be asked to ensure new job ad titles for vacancies are written in a gender-neutral fashion. For example, using terms such as ‘salesperson’ instead of ‘salesman’, ‘administrative assistant’ instead of ‘secretary’, or ‘chairperson’ instead of ‘chairman’.
It’s OK to be curious about a candidate's past, but you can’t use it as leverage. The pay disclosure guidelines prohibit employers from asking job applicants about their previous pay when filling employment positions.
Knowledge is power, as the saying goes. The new regulations act to empower employees by guaranteeing them access to information. Your employees have the right to be kept informed about salary rates. Under the new directive, employers will be asked to comply with reasonable employee requests for salary data.
This right isn’t just limited to individual rates of pay. Employees will have the right to request information on average pay rates in the organisation. Once a request is filled, employers have 60 days to share the relevant salary data with the employee or their representative. The information should be provided to the employee in writing, categorised by gender and for teams performing equal or comparable work. If required, civil authorities can also access company salary information and pay range statistics.
Furthermore, employers should inform employees annually of their right to access salary information.
Companies will be compelled to provide employees with information on criteria for pay increases and career progression.
It’s advisable that employers establish objective, gender-neutral criteria for pay equity and professional development. These can include the skills level of the applicant, their relevant past experience, and the level of responsibility the role entails. It’s worth noting, however, that pay differences based on competence or performance appraisals for equal-value work are allowed.
It’s not enough for your company to just say it has complied with the law: you’ll also need to prove you’ve made the effort. To ensure accountability, develop frameworks to prepare regular reports. Submissions will be required annually or every three years, depending on the size of the enterprise as mentioned before.
Pay reports can be shared via company websites or through other means. Reports aid in assessing pay policies, identifying gaps, and tracking progress.
In instances where the gender pay gap surpasses 5% for a company with 100+ employees, the directive outlines the usefulness of a corrective measure such as a joint pay assessment. This is a process where employers evaluate and compare pay structures across their organization to identify and address gender pay gaps.
If your company does have an issue with salary gaps, then you won’t be able to simply rely on your employees to point it out. The employer is now the one who has to show there’s no unfair pay gap, instead of the employee. Employers may need to implement other accountability measures, such as conducting pay audits to monitor unintentional pay inconsistencies or developing risk mitigation action plans.
If an employee can prove they’ve been paid unfairly, then your company may have to reimburse them. Employees impacted by gender pay discrimination are eligible for compensation, including back pay and other benefits.
As with any major change, there are also risks and challenges associated with the new regulations. Be aware your company may need to overcome issues such as:
Not all people will be happy to disclose their salaries. Transparency may cause issues among employees earning different rates for equal work value. Resistance may cause slowdowns and hinder productivity.
You can create a culture of trust by clearly explaining the benefits of pay transparency. You may also wish to open anonymous feedback channels so employees can share their concerns.
There is a possibility that the directive might increase pressure on management executives to retain top talent. As more companies publicise salary data, instances of employee poaching by competitors could rise.
To secure talent, organisations may have to increase their compensation packages. Great news for new hires, but it could also result in budget strains or financial overload for the company. It’s well worth it to spend some time developing retention strategies such as increasing development opportunities and offering more flexible work arrangements.
Companies usually offer higher rates of pay for new positions. Adjusting existing salaries can be a difficult process. Your current employees might feel undervalued compared to newcomers. To address this, keep lines of communication open and review pay structures regularly to keep things fair.
You might want to consider conducting regular market benchmarking and implementing phased salary adjustments. This can help you align pay equity without impacting the company’s bottom line.
There may be people who are more likely to question management about pay gaps or ask for clarification on policies. While open communication is a positive benefit, the increased rate of requests may be overwhelming. With better access to information, some employees could develop unrealistic expectations about what they’re worth.
How to tackle this issue? Establish clear, consistent communication about compensation policies. You can also provide your managers with extra training so they can more effectively handle salary discussions.
Navigating data privacy requirements and transparency laws can be tricky. Making salary data publicly available needs to be done in a way that doesn’t breach privacy laws or confidentiality agreements.
To handle this, companies can share salary data in a way that keeps it anonymous and grouped together, so it follows privacy laws. Getting legal advice and setting clear rules can help avoid issues.
There are a range of measures you can undertake to prepare for the EU Pay Transparency Directive. These include:
Review your current pay policies to check if there are any gender pay gaps. Brainstorm action plans or seek corrective measures to close the gaps.
For instance, you can introduce an impartial criterion for evaluating employees who perform work of equal value for job promotions. Reviewing people using skills-based criteria helps remove bias and highlights opportunities for employees to develop new skills.
Looking at different employee groups can help you see areas where changes are needed. For instance, you can compare the average pay between men and women in similar roles to find any salary differences.
Including gender pay equity in risk assessments ensures it will align with normal business operations. Performing a pay equity audit can help identify potential setbacks and avoid penalties.
Salary guides provide clear benchmarks for fair and equitable pay. They enable organisations to assess current compensation structures, align salaries with industry standards, and identify potential disparities.
Michael Page comprehensive salary guides contain critical insights and information that can help you comply with the new directive. You can quickly and easily compare how your salaries stack up against current industry trends to ensure you attract the best candidates and maintain a competitive edge.
The EU Pay Transparency Directive is a framework to enforce equal pay for equal-value work in EU companies. The law aims to eliminate the gender pay gap in the EU.
Adopt updated salary reporting processes and guarantee transparency in job postings, including clear details about career progression. Non-compliance may result in penalties, such as fines and legal action.
EU member states will implement the new pay transparency directive by 7 June 2026. However, each country will develop legal frameworks for enforcing the regulations. Hence, timelines may vary slightly across the EU.
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