EU Pay Transparency: No Need to Panic (Yet)!

The EU’s pay transparency local regulations continue to roll out, but we are still waiting for the majority of countries to publish their requirements. But I have noticed that some people seem to misinterpret the dates of the directive and stoke unnecessary panic about looming deadlines.

I certainly hope that you have started to prepare your initiative, or have at least planned for it. And while it’s true that implementing these changes takes time, the fear-mongering around how behind companies are is overstated. Even if you haven’t started yet, you’re not as behind as you think, and there’s still plenty of time to get your pay transparency program in place. Let’s set the record straight and take a closer look at why the rush is mostly a myth.

What’s the June 7, 2026 deadline about?

June 7, 2026 is the deadline for EU Member States to have fully transposed the EU Directive on Pay Transparency into their national laws. This means that by this date, each country must have passed its own legislation to implement the directive’s requirements. The June 7, 2026 date doesn’t mean organizations must be compliant by then; they will have time to adjust to the regulations as they come into effect. Look up the state of your local legislation in the transpostion tracker.

Should you wait with the program until your local legislation is available?

My short answer is no, you shouldn’t wait until the local legislation is finalized before starting to implement a pay transparency program. Here’s why:

Even though the final local laws won’t be in place until 2026, the core principles behind the EU Pay Transparency Directive are clear. I always say that when you read the directive, you know what to do. You can take proactive steps now to define your job architecture, assess your pay structures, make reparations, ensure internal pay equity, and set up systems for reporting. This will put you ahead of the curve and reduce the risk of rushing when the deadline approaches.

Starting early means you’ll be better prepared for whatever final form the national laws take. From what we’ve seen so far, the local regulations stay very close to the directive. They will likely involve more detailed descriptions like the pay elements that you must include, or how to organize employees for reporting. By getting a head start, you might need to do some fine-tuning, but you won’t be scrambling when the official deadline comes.

And a final, but important reason to get going now: you often need the approval or consent of the works council or employee representatives for these measures – and that takes time. When you design your program, don’t forget to leave enough time for these consultations.

Can I use December 31, 2025 for my first report?

Yes, you can. There are two ways to report:

• Snapshot Date: This report provides a point-in-time view that’s often easier to manage and compare year-over-year. It offers consistency, but it may miss fluctuations during the year.
• Full-Year Averages: This report reflects a more comprehensive picture of pay over an entire year, accounting for promotions, salary changes, and bonuses throughout the year. It can be more reflective of the broader pay equity environment. But it requires more complex calculations and data tracking.

Typically, organizations choose a fiscal quarter-end or year-end date, such as December 31st or March 31st, so it aligns with regular business reporting cycles. Since most European business use the calendar year as fiscal, I expect that December 31st will be popular. It’s also possible to combine both: use a snapshot date for compliance and then provide additional insights based on annual averages to give a fuller picture. I haven’t read all the local legislation, but so far, I don’t think I’ve seen a requirement to use a specific method. (Feel free to correct me if I’m wrong).

What happens if salary increases or bonuses occur after the snapshot date?

Great question! The answer is: you can’t include salary changes that happen after your snapshot date. If you were to include these, you’d risk distorting the picture of your pay structure. However, it’s important to acknowledge these changes in your report. For example, if employees will receive raises or bonuses in January, you should clearly note that the reported figures reflect compensation as of your snapshot date (e.g., December 31st), and that future increases will be reported next year. This way, you’re being upfront about any potential discrepancies while still maintaining the integrity of your report.

Important: time salary increases well!

Let me clarify by giving you an example: If your company typically runs performance appraisals in December, and awards salary increases at that time, please remember that these increases will not be reflected in your 2026 pay transparency report. These salary adjustments will only be applied in January 2027. They don’t count toward your pay transparency calculations for 2026. To ensure that your salary increases contribute to meeting the 5% threshold for the gender pay gap, it’s crucial to time them well. By planning salary increases earlier in the year (ideally before the snapshot date or end of reporting period) you can ensure that they are factored into your pay equity analysis and contribute to closing any identified gaps in the current reporting cycle.

You are not too late!

While you should not panic yet, today is a great time to kick things off. The earlier you begin, the more time you’ll have to address potential issues, adjust policies, run consultations and properly gather data. The majority of the work involves gathering data, ensuring it’s accurate, and understanding how it reflects your pay practices. It takes time, but this is a process you can handle within the next several months. There’s still ample time before the reports are due, so don’t feel rushed. Having said that, the deadline is approaching, so getting a plan in place now will give you a smoother process down the road.