In this week’s Blog, Nuala McGowan, ACA, CPA, AIA, and founder of McGowan Accountancy Services writes on Gender Pay Gap (GPG) Reporting, which is a legal requirement for many employers to measure and publicly report differences in average pay between men and women in their workforce. The purpose is to increase transparency and encourage organizations to identify and address pay disparities.

Who must report?

The reporting obligations have been introduced in phases:

  • 2022: Employers with 250 or more employees
  • 2024: Employers with 150 or more employees
  • 2025 onward: Employers with 50 or more employees

The employee threshold is assessed on the designated “snapshot date” each year.

What must employers report?

Organizations must calculate and publish several gender pay gap metrics, including:

  • The difference in mean (average) hourly pay between men and women.
  • The difference in median hourly pay.
  • The difference in mean and median bonus pay.
  • The percentage of men and women who received bonuses.
  • The percentage of men and women who received benefits in kind (such as company cars or private health insurance).
  • The distribution of men and women across four pay quartiles (lower, lower-middle, upper-middle, and upper).

It’s important to note that the gender pay gap is not the same as equal pay:

  • Equal pay means men and women receive the same pay for the same work or work of equal value, which is required by law.
  • The gender pay gap measures the overall difference in average earnings across an organization. A gap can exist even where equal pay laws are fully complied with, often because of differences in occupational distribution, seniority, working patterns, or representation in leadership.

Narrative and action plan

Alongside the numerical data, employers are expected to publish:

  • An explanation of the reasons for any gender pay gaps identified.
  • The measures being taken, or proposed, to reduce those gaps.

This narrative is an important part of the report because it provides context that the figures alone cannot.

Publication requirements

Employers must:

  • Publish the report on their website (or make it otherwise publicly accessible if they do not have a website).
  • Keep the report available for public viewing for the required period under the regulations.
  • Report within the prescribed timeframe following the annual snapshot date.

Common causes of a gender pay gap

A gender pay gap does not necessarily indicate unequal pay. Common contributing factors include:

  • Fewer women in senior or executive roles.
  • Occupational segregation (men and women concentrated in different job types).
  • Higher proportions of part-time work among women.
  • Career breaks related to caring responsibilities.
  • Differences in bonus eligibility or participation in incentive schemes.

How employers prepare

Many organizations prepare by:

  1. Identifying the employees included in the reporting population.
  2. Gathering payroll and HR data.
  3. Calculating the required metrics.
  4. Validating the results.
  5. Investigating the drivers behind any gaps.
  6. Developing an action plan to improve gender balance and reduce disparities over time.

Benefits of reporting

Beyond legal compliance, gender pay gap reporting can help organizations:

  • Improve transparency and employee trust.
  • Strengthen recruitment and retention.
  • Identify barriers to career progression.
  • Support diversity, equity, and inclusion initiatives.
  • Benchmark progress from year to year.

Overall, gender pay gap reporting is intended as a transparency measure rather than a compliance test. An employer is not considered to be in breach of the law simply because it has a gender pay gap. Instead, the reporting framework is designed to encourage organizations to understand the underlying causes of any gaps and take informed action where appropriate.