What is the EU Pay Transparency Directive?
The EU Pay Transparency Directive (formally: Directive (EU) 2023/970) is a milestone in the EU's work to secure equal pay for equal work between men and women. The directive was adopted by the European Parliament and the Council on 10 May 2023, and member states had to transpose it into national law by 7 June 2026.
The directive builds on Article 157 of the Treaty on the Functioning of the European Union (TFEU), which establishes the principle of equal pay for male and female workers. What is new is that the directive introduces concrete mechanisms for pay transparency and enforcement, making it far easier for workers to identify and challenge gender-based pay differences.
Why was the directive needed?
Despite decades of equal pay legislation, a significant gender pay gap persists across the EU. The average unadjusted gap in the EU stands at 11.1% (Eurostat, 2024 reference year). The European Commission identified three main reasons why existing legislation has fallen short:
- Lack of transparency: Workers have no access to pay information and therefore cannot identify discrimination
- Unclear remedies: It is difficult for workers to evidence and challenge unjustified pay differences
- Weak enforcement: Penalties have been insufficient and inconsistent across member states
Who does the directive apply to?
The directive applies to all employers in both the public and private sector in every EU member state. It covers all workers with an employment contract or employment relationship as defined by national law, collective agreements or practice.
Reporting requirements by company size
Reporting every three years
First report: by 7 June 2031
Reporting every three years
First report: by 7 June 2027
Annual reporting
First report: by 7 June 2027
What must be reported?
Employers must report the following to the competent national authority:
- Gender pay gap (mean and median)
- Gender pay gap in complementary or variable components (bonuses, allowances)
- The proportion of women and men in each pay quartile
- Gender pay gap by category of workers, broken down by ordinary basic salary and complementary or variable components
The six core requirements of the directive
The directive introduces six main requirements that together create a comprehensive system of pay transparency. Each requirement has specific provisions that employers must implement.
Pay transparency in recruitment (Article 5)
Applies to all employers once national law takes effect
Job applicants have the right to information about the initial pay or pay range for the advertised position. This ensures applicants can make informed decisions and negotiate pay on an equal footing.
In practice this means:
- The pay range must appear in the job advert OR be provided before the interview
- Employers must not ask applicants about their current or previous pay
- Applicants must be informed of any relevant provisions in collective agreements
Workers' right to pay information (Article 7)
Applies to all employers once national law takes effect
Workers have the right to written information about their own pay level and the average pay levels, broken down by gender, for categories of workers performing the same work or work of equal value.
Every worker has the right to know:
- Their own individual pay level
- Average pay levels, broken down by gender, for comparable workers
- The criteria used to determine pay, pay levels and pay progression
Deadline: The employer must respond within a reasonable time and no later than two months after the request.
Gender-neutral pay structures (Article 4)
Foundational requirement
Pay structures must make it possible to assess whether workers are in a comparable situation with regard to the value of their work. This requires a job architecture built on gender-neutral criteria.
The four EU criteria for the value of work:
education, experience, knowledge
physical and mental demands
for people, resources, processes
physical environment, working hours
Gender pay gap reporting (Article 9)
Employers with 100+ employees
Employers must report their gender pay gap to the competent national authority and make parts of the information publicly available.
The report must include:
- The pay gap (mean) between all female and male workers
- The pay gap (median) between all female and male workers
- The gap in complementary or variable components (bonuses, allowances, benefits in kind)
- The proportion of women and men in each pay quartile
- The pay gap by category of workers
Joint pay assessment, the 5% rule (Article 10)
The critical provision
The 5% rule means that if pay reporting reveals a gender pay gap of at least 5% in any category of workers, the gap is not justified by objective, gender-neutral criteria, and it has not been remedied within six months of the reporting date, the employer must act.
When the threshold is crossed:
- Carry out a joint pay assessment in cooperation with workers' representatives
- Establish remedies and an action plan
- Close the unjustified gap within a reasonable period
Remedies and enforcement (Articles 16 to 23)
Reversed burden of proof
The directive significantly strengthens workers' legal position. The burden of proof shifts to the employer once a worker has established facts from which discrimination may be presumed, or where the employer has breached its transparency obligations.
Workers' rights in case of a breach:
- Right to full compensation, including recovery of back pay and related bonuses
- Right to interest on arrears
- Compensation for lost opportunities and non-material damage
- No upper limit on compensation
- Protection against retaliation
Member states must also lay down effective, proportionate and dissuasive penalties, including fines (Article 23).
The complete timeline and deadlines
Here is the full timeline for the directive and the key milestones for employers across the EU.
| Date | Milestone | Details |
|---|---|---|
| 10 May 2023 | Directive adopted | The European Parliament and the Council adopt Directive (EU) 2023/970 |
| 6 June 2023 | Entry into force | The three-year transposition period begins |
| 2024 to 2026 | Preparation | Employers build job architectures and pay structures |
| 7 June 2026 | EU transposition deadline | National legislation due in all member states. Only four countries met it in full |
| 2026 to 2027 | National laws take effect | Late member states target entry into force during 2026 and 2027, several on 1 January 2027 |
| 7 June 2027 | First pay gap reports (150+) | Employers with 250+ employees report annually, 150 to 249 every three years |
| 7 June 2031 | First pay gap reports (100 to 149) | Employers with 100 to 149 employees report every three years |
Implementation status: where every member state stands
The transposition deadline passed on 7 June 2026, and most member states missed it. Here is the picture as of July 2026.
Last updated: July 2026
Fully transposed (4 member states)
- Italy: Legislative Decree No 96/2026, in force 7 June 2026
- Slovakia: Equal Pay Act No 76/2026 Coll., in force 7 June 2026
- Lithuania: Labour Code amendments (Law XV-969), in force 7 June 2026, with some technical provisions deferred to 31 December 2026
- Malta: Legal Notice 173 of 2026 (Equal Pay Transparency and Reporting Regulations), in force June 2026
Partially in force
- Poland: recruitment-stage transparency rules in force since 24 December 2025; a further draft covering the remaining obligations was published in April 2026
- Czechia: bans on pay secrecy clauses and salary history questions in force since 1 June 2025 via the Labour Code "flexi-amendment"
- Belgium: a decree of the Fédération Wallonie-Bruxelles has applied to part of the public sector since 1 January 2025; federal transposition is pending
Delayed: draft legislation published
- France: draft law published, targeting entry into force on 1 January 2027
- Netherlands: officially targeting 1 January 2027
- Denmark: draft bill published 26 February 2026, entry into force planned for 1 January 2027
- Ireland: the first member state to publicly confirm it would miss the deadline; the Pay Transparency Bill is still in preparation and substantive legislation is expected late 2026 at the earliest. Note that Ireland already runs mandatory gender pay gap reporting for employers with 50+ employees under the Gender Pay Gap Information Act 2021
- Finland: draft published May 2025, implementation delayed
- Spain: public consultation on a Royal Decree closed 8 May 2026, no draft text yet
- Sweden: paused its transposition in March 2026 and is seeking a postponement and renegotiation of the directive at EU level
- Bulgaria, Cyprus, Latvia, Romania: drafts or consultations in progress, none enacted
No public draft yet
Germany, Austria, Portugal, Luxembourg, Hungary, Estonia, Greece, Croatia, Slovenia. Germany is the largest economy yet to publish a draft; transposition is expected to build on the existing Entgelttransparenzgesetz (2017).
What happens to late member states?
The European Commission has confirmed that the deadline is not moving. From 8 June 2026, member states that have not notified complete transposition are in breach of EU law, and the Commission can open infringement proceedings under Article 258 TFEU, starting with letters of formal notice. For employers the practical message is unchanged: the directive's requirements and the 7 June 2027 reporting deadline remain the anchor dates, and national laws will land during 2026 and 2027 with little extra lead time.
Track the latest status for all 27 member states on our EU implementation tracker.
How to prepare: a six-step guide
Preparing for the directive requires a systematic approach and typically takes 6 to 18 months depending on the size and complexity of your organisation. These are the essential steps:
Map every role in the organisation and create a structured job architecture with job families, levels and categories. This is the absolute foundation of compliance.
Run a pay gap analysis to identify any gender-based pay differences. Assess whether differences can be justified objectively with gender-neutral factors.
Every pay decision must be documented and traceable. A complete audit pack is essential in the event of disputes or supervisory review.