Gender Pay Gap Reporting: A Checklist for Employers

Gender pay gap reporting isn’t just another HR compliance box to tick or a legal requirement for Great Britain businesses (England, Scotland and Wales). Instead, it’s a vital step towards fairness, transparency and trust in the workplace. 

We’ll take a deep dive into gender pay gap reporting for employers, business leaders and HR professionals. We’ll walk you through the entire process, covering key definitions, reporting duties and the steps for calculating your data accurately.

What is the gender pay gap?

The gender pay gap is the difference in the average pay of men and women across an organisation’s workforce. It doesn’t compare people in the same roles, but instead looks at overall pay distribution. It’s expressed as a percentage of men’s average earnings. For example, a 15% difference means that, on average, women earn 15% less than men.

It’s important to keep in mind that a disparity can exist even if your business pays men and women equally for the same job, simply because of differences in seniority, working patterns or representation across departments.

It’s crucial to distinguish the gender pay gap from equal pay. Equal pay is a legal requirement under the Equality Act 2010, stipulating that men and women doing equal work (or work of equal value) must receive equal pay. A disparity can exist even when an organisation has perfect pay equity, as it reflects broader workforce distribution rather than comparing two specific roles.

For reporting purposes, the term ‘employee’ has a broad meaning under section 83 of the Equality Act 2010 and may include certain workers and apprentices, not just individuals on standard employment contracts.

What causes the gender pay gap?

The gender pay gap isn’t usually caused by employers deliberately paying women less for the same job. Instead, it’s a complex issue driven by structural and societal factors. These can include:

• Industry and role segregation: Some industries and job roles are historically dominated by one gender. Occupations that are female-dominated have often been valued and paid less than those dominated by men.
• Seniority imbalance: A higher proportion of men in senior, higher-paying roles is a significant contributor. If women are concentrated in junior or mid-level positions, the overall average pay for women will be lower.
• Part-time work: Women are more likely to work part-time, often to balance work with caring responsibilities. Part-time roles are frequently lower-paid per hour and offer fewer opportunities for progression.
• Caring responsibilities: The societal expectation for women to be primary caregivers can lead to career interruptions or a move to more flexible, but less senior, roles.
• Unconscious bias: Bias during recruitment, promotion and pay decisions can inadvertently favour men over women. 

Why was gender pay gap reporting introduced?

To address these deep-seated issues, the government introduced the Equality Act 2010 (Gender Pay Gap Information) Regulations in 2017. The primary goal of this legislation is to increase transparency and accountability among employers.

By requiring organisations to publish their data, the government aims to encourage them to investigate the causes of any gap and take meaningful action to close it. The public nature of the reporting puts a spotlight on pay disparities, motivating companies to improve their practices and create more equitable workplaces.

Changes to the gender pay gap over time

Since the introduction of reporting, there has been a slow but steady downward trend in Great Britain’s wage disparity. According to the Office for National Statistics (ONS), the median pay gap for full-time employees has been declining over the long term.

However, progress is not uniform across all sectors and age groups. The difference tends to widen significantly for women over 40, often coinciding with career breaks for childcare. While the overall trend is positive, it highlights that sustained effort and targeted interventions are still needed to achieve true pay parity.

Why should the gender pay gap be addressed?

Beyond legal compliance, addressing the wage difference offers substantial business benefits. Proactively working to close your gap can:

• Improve brand reputation: Demonstrating a commitment to fairness and equality enhances your public image and strengthens your brand.
• Attract and retain diverse talent: Top candidates, especially from younger generations, actively seek out inclusive employers. A transparent approach to pay equity makes you a more attractive place to work, helping you secure and keep the best talent.
• Boost employee engagement and productivity: A fair and equitable workplace fosters trust and morale. When employees feel valued, they are more engaged, motivated and productive.
• Drive better decision-making: Diverse teams, particularly at the leadership level, bring a wider range of perspectives, leading to more innovative solutions and better business outcomes.

Ensuring you meet your legal obligations is part of a broader HR compliance strategy. An effective Equal Employment Opportunity and Anti-Discrimination Policy is also fundamental to building a fair workplace.

What do I have to report and when?

Under the regulations, employers in Great Britain with 250 or more relevant employees on a specific ‘snapshot date’ are required to report and publish their data annually. The specific snapshot date depends on your sector.

You must calculate and publish six key figures:

1. Mean gender pay gap in hourly pay.
2. Median gender pay gap in hourly pay.
3. Mean bonus gender pay gap.
4. Median bonus gender pay gap.
5. Proportion of males and females receiving a bonus payment.
6. Proportion of males and females in each pay quartile.

You also have the option to provide a supporting narrative. This is highly recommended, as it allows you to explain your results, detail the reasons for any gaps and outline the actions you are taking to address them.

When do I have to publish the report?

The deadline for publishing your report is determined by your organisation type. The snapshot date is the day on which you must collect your pay data.

• Private and voluntary sector employers: Your snapshot date is 5 April. You must publish your report no later than 4 April of the following year.
• Public sector employers: Your snapshot date is 31 March. You must publish your report no later than 30 March of the following year.

These deadlines are fixed, so it’s essential to plan your data collection and calculation process well in advance to ensure timely publication.

Where do I have to publish the report?

You are required to publish your gender pay gap information in two places:

1. On your organisation’s website: The report must be published in a searchable and accessible location on your own public-facing website. It must remain online for at least three years.
2. On the government’s gender pay gap portal: You must also upload your data to the government’s official reporting service.

A director, partner, or other senior individual must sign a written statement confirming the accuracy of your calculations before publication.

What earnings do I have to take into account?

To calculate your gender pay gap figures, you need to understand what constitutes ‘ordinary pay’ and ‘bonus pay’.

Ordinary pay includes:

• Basic salary or wages.
• Allowances (e.g., car allowance, location allowance).
• Pay for piecework.
• Pay for leave (e.g., annual leave, sick leave, maternity leave).
• Shift premium pay.

It does not include overtime pay, redundancy pay or benefits in kind.

Pay during periods of leave is included only if paid at the employee’s usual full rate. Statutory or reduced-rate leave pay is excluded once it falls below normal pay.

Bonus pay refers to any remuneration that is in the form of money, vouchers, securities or options and relates to profit sharing, productivity, performance or other similar measures. This includes both one-off payments and regular, contractual bonuses. It should be recorded as the gross amount before tax deductions.

What happens if an employer doesn’t report on their gender pay gap?

Failing to report your gender pay gap data on time is unlawful. The Equality and Human Rights Commission (EHRC) is responsible for enforcing the regulations.

The EHRC can take several enforcement actions against non-compliant employers, including:

• Informal resolution: Engaging with the employer to encourage them to comply.
• Formal investigation: Launching a formal investigation to determine whether a breach has occurred.
• Unlawful act notices: Issuing a notice that requires the employer to produce an action plan to remedy the breach.
• Court orders: Seeking a court order to force compliance, which, if ignored, can lead to unlimited fines.

Beyond the legal penalties, the reputational damage can be significant. The EHRC has previously named and shamed non-compliant employers, leading to negative publicity and potential harm to the organisation’s brand and its ability to attract talent.

How to calculate your gender pay gap

Calculating your gender pay gap requires a methodical approach. The process involves identifying relevant employees, gathering pay data and performing a series of calculations. Efficient HR reporting software can greatly simplify data extraction and analysis.

Here’s a breakdown of the key calculations:

1. Mean gender pay gap: The mean is the overall average. To calculate this, find the average hourly pay for men and the average hourly pay for women. The difference between these two figures, expressed as a percentage of the men’s average, is your mean gender pay gap.
2. Median gender pay gap: The median is the middle value. To find this, list all male and female employees’ hourly pay from highest to lowest. The median is the hourly pay of the middle-ranking person. The difference between the median man’s and median woman’s pay, as a percentage of the man’s median, is your median gap. The median is often seen as a more representative measure as it is not skewed by a small number of very high or low earners.
3. Bonus gaps (mean and median): These are calculated in the same way as the hourly pay gaps, but using bonus payments received over the 12 months leading up to the snapshot date.
4. Pay quartiles: To calculate your pay quartiles, you list all your employees’ hourly pay from lowest to highest. You then divide this list into four equal-sized groups (quartiles). Finally, you calculate the percentage of men and women in each of these four quartiles. This shows the gender distribution across your pay bands.

Who should perform the calculations?

Gender pay gap reporting is typically a collaborative effort. The HR or payroll teams are usually responsible for gathering the employee and pay data, as they have direct access to the necessary systems. Ensuring accurate and complete data is fundamental for payroll compliance.

The calculations may be performed by these teams or by a dedicated analyst. However, the final report must be reviewed and signed off by a senior leader, such as a CEO, Managing Director or Chief HR Officer, to confirm its accuracy. This senior-level accountability underscores the importance of the report. 

Legislation relating to gender pay gap reporting

The legal framework for gender pay gap reporting in Great Britain is based on two key pieces of legislation:

• The Equality Act 2010: This act provides the overarching legal framework for tackling discrimination and promoting equality in the workplace. Section 78 of the act gave the government the power to introduce regulations requiring employers to report on their gender pay gap.
• The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017: These are the specific regulations that set out the detailed requirements for private and voluntary sector employers with 250 or more employees. A similar but separate set of regulations applies to public sector bodies.

These laws mandate not just what to report, but also how and when to report it. Compliance is not optional and understanding this legal framework is the first step toward fulfilling your obligations.

Download the full checklist

Gender pay gap reporting is more than a box-ticking exercise. It’s an opportunity to gain valuable insights into your workforce, identify potential barriers to progression and build a more inclusive and high-performing organisation. By taking a proactive and transparent approach, you can turn a legal requirement into a strategic advantage. For more support, get in touch with Employment Hero’s HR Advisory service. 

To help you manage the process effectively, we’ve created a practical checklist. It covers everything from reporting timelines and calculation formulas to best practices for writing your supporting narrative.