From 2026, the EU Directive on pay transparency will require companies with more than 100 employees to take far-reaching measures: salary band information in job advertisements, disclosure requirements for comparative salaries, and internal reports on the gender pay gap. What at first glance appears to be an additional bureaucratic burden is in fact a significant step toward fairness, transparency, and employer attractiveness.
What is the EU Pay Transparency Directive?
The directive aims to eliminate gender-specific pay differences within the EU. To achieve this, companies are required to be more open about their pay structures. The most important points at a glance:
- Obligation to specify salary ranges in job advertisements
- Right of employees to information about comparative salaries
- Annual or biennial reporting obligations for companies with more than 100 employees
- Obligation to eliminate salary differences unless they are objectively justified
Who is affected by the EU directive?
The directive will come into force in 2026, initially for companies with more than 250 employees. Companies with 150+ employees will follow in 2027, and those with more than 100 employees in 2031. Regardless of the size of the company, however, it is worth addressing the issue early on, as transparency has long since become a decisive factor in employer branding.
What does this mean in practice?
The directive does not only affect recruiting or HR controlling. It has an impact on almost all areas of human resources work:
- Existing compensation structures must be analyzed and, if necessary, restructured.
- Recruiting processes require adjustments (e.g., binding salary information).
- Managers need certainty when dealing with questions of pay equity.
- Internal communication must be prepared for new expectations and possible points of friction.
Our recommendation: Be proactive rather than reactive
Many companies tend to act only when forced to do so by legal deadlines or external controls. In the case of the EU Pay Transparency Directive, this is risky - not only because of possible sanctions, but also because of the impact on employees and applicants.
It is worth taking a strategic approach to the new requirements and setting your own standards at an early stage:
- Analysis & evaluation of existing systems: Review your remuneration structures, processes, and communication channels for transparency and fairness. Identify weaknesses before they become a problem.
- Develop transparent, fair salary logic: Define clear salary bands, criteria, and development levels. This will create transparency for employees and competitive advantages in recruiting.
- Prepare HR & management for new communication: Train HR teams and managers to deal openly with salary issues. Clear, consistent messages strengthen trust both internally and externally.
This turns a legal obligation into an opportunity to make your own compensation model modern, fair, and sustainable - while positioning yourself as an attractive employer.
Checklist: How you can start implementing the EU Pay Transparency Directive now
We have created a practical checklist that will help you tackle the most important measures and issues in a structured manner:
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Topics include:
- Compensation analysis & band structure
- Reporting preparation
- Internal & external communication
- HR process adaptation
- Change management
How we support you
As a specialized HR consultancy, we help companies not only to implement the directive, but also to use it as a lever for strategic development.
Our services:
- Compensation analyses & development of salary logic
- Workshops for HR & managers on communicating salary & transparency
- Change management support
- Preparation of reporting, guidelines & internal communication
📞 Talk to us - no obligation and practical advice.
FAQ on the EU Pay Transparency Directive
1. What is the EU Pay Transparency Directive?
The directive is an EU-wide law promoting equal pay for men and women. Its aim is to reduce gender-specific pay gaps by requiring companies to be more transparent about salaries.
2. When does the directive come into force?
The directive was published in June 2023 and must be transposed into national law by June 7, 2026, at the latest.
The reporting requirements apply in stages:
- From 2026: Companies with 250+ employees
- From 2027: Companies with 150+ employees
- From 2031: Companies with 100+ employees
3. Which companies are affected?
Basically, all companies with at least 100 employees. However, smaller companies must also comply with the directive, as the obligation to specify salary ranges in job advertisements applies to all employers, regardless of company size.
4. What specific obligations will companies have?
The most important requirements:
- Salary range information in job advertisements
- Employees' right to information about the average comparative salary
- Internal reports on gender pay gaps (for companies with 100 or more employees)
- Obligation to eliminate unjustified pay differences
5. Do we have to specify a salary in every job advertisement?
Yes. In future, companies will have to specify either the exact salary or a salary range before an interview takes place. The aim is to create greater transparency for applicants and fairness in recruiting.
6. What happens if we do not comply with the guidelines?
Violations may result in:
- Legal consequences (e.g., lawsuits by individual employees)
- Fines imposed by supervisory authorities
- Reputational damage, especially in the labor market
In addition, if an employee can prove that they have been discriminated against in terms of pay, the burden of proof lies with the employer.
7. How can we prepare?
Important first steps include:
- Analyzing the existing compensation structure
- Documenting salary bands and criteria
- Adjusting job postings
- Training HR and managers
- Preparing for reporting requirements and data management
Tip: Use our free checklist for structured preparation.
10. Do you also offer support with implementation?
Yes. As a specialized HR consultancy, we support you in areas such as:
- Compensation analyses & band structuring
- Workshops & training courses for HR & managers
- Development of transparent compensation models
- Support with communication & change management
- Preparation for reporting obligations & disclosure procedures
📞 Book a no-obligation consultation now - we will provide you with practical and individual support right from the start.
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