Pay Transparency Directive: How to Prepare

Date

04 Nov 2025

Pay Transparency Directive: How to Prepare

The Pay Transparency Directive approved by the European Parliament introduces significant changes to employers’ obligations. Although national legislation is still being finalised, it’s advisable to begin preparations now.

Objective of the Pay Transparency Directive

The directive aims to strengthen the principle of equal pay for women and men by increasing pay transparency.

According to the principle of equal pay, individuals performing the same or equivalent work must receive equal pay regardless of gender. Pay levels must be based on objective criteria to prevent unjustified pay gaps. This promotes gender equality and fairness in the workplace.

When Will the Pay Transparency Directive Come into Force?

In Finland, the Ministry of Social Affairs and Health published a proposal for implementing the directive in May 2025, which is currently under consultation. The legislative changes are expected to be finalised by early 2026. National legislation will come into effect by June 2026 at the latest.

Who Does the Pay Transparency Directive Apply To?

The directive applies to employers of all sizes in both the private and public sectors. However, the reporting obligation regarding pay gaps applies only to workplaces with at least 100 employees. These employers must publish an assessment of gender-based pay differences. The exact year when this obligation will begin in Finland is not yet known.

For employees, the directive applies to all those in an employment relationship and, to some extent, also to job applicants.

What Does Pay Transparency Mean for Employers?

The directive sets minimum requirements for changes in national legislation. Therefore, preparations can begin even before the national laws are finalised.

Key requirements of the directive:

- Transparency of pay structures: Employers must disclose the criteria for pay determination to employees without a separate request. They must also ensure that job roles can be reliably compared using these structures.

- Right to information: Employees have the right to access information about their own pay and the average pay of others doing the same or equivalent work, broken down by gender.

- Transparency before recruitment: Job applicants must be informed of the pay level for the position at the early stages of the recruitment process.

- Reporting obligation: Employers with more than 100 employees are required to report on gender pay gaps at regular intervals.

- Pay assessment: If a reported gender pay gap exceeds 5% without a justified explanation, the employer must carry out a pay assessment in cooperation with employee representatives.

Pay transparency is not just a legal obligation – it’s also an opportunity. A transparent pay policy promotes equality, strengthens employer branding, and can serve as a competitive advantage in recruitment. It also enhances employees’ sense of fairness, trust in the employer, and performance.

Azets Helps You Prepare for Pay Transparency

Need help preparing for the Pay Transparency Directive? We’ve developed a comprehensive service package to support compliance with the directive’s requirements.

Book a free initial assessment, where we’ll review your organisation’s current state and needs. Contact us by phone at 010 756 4500, by email at myynti@azets.com, or via our contact form.

After the Initial Assessment, You Can Choose from the Following Services:

Current State Analysis

This analysis provides an overview of your pay system and helps you prepare for the directive. The service includes:

- Kick-off meeting
- Mapping of the current state
- Final report with development suggestions
- Tailored information material on key changes related to pay transparency

The analysis gives a clear picture of your organisation’s pay policy, structure, and recruitment practices. We also provide concrete recommendations for improving transparency and equality. It serves as a solid foundation for further actions, such as updating the pay system or improving reporting capabilities.

Pay System Development

We help you build a transparent, fair, and directive-compliant pay model. Based on the needs identified in the current state analysis, the service may include:

- Definition of different components of the pay structure (e.g. job-specific pay and job evaluation)
- Definition of pay levels and pay progression policies
- Final report on pay determination principles and readiness to meet legal requirements

This development work results in a clearer pay structure, enhancing internal fairness and strengthening your employer image. It also supports the development of reporting capabilities and forms the basis for ongoing reward development.

Reporting

Our reporting service supports you in fulfilling the directive’s reporting obligations. The service includes:

- Mapping of required data
- Assessment of your current systems’ capabilities
- Compilation of data needed for reporting
- Support in system selection

With this service, you gain a clear view of your reporting readiness and identify any gaps. We ensure your reporting is consistent, up to date, and compliant with the directive – with no surprises.

Pay Gap Analysis

With pay gap analysis, you can identify and assess potential gender-based pay differences. The service includes:

- Collection and grouping of pay data
- Analysis of differences by job complexity
- Identification of unexplained differences
- Concrete recommendations for addressing issues

This analysis provides a clear view of the equality of your reward system. It supports compliance with the directive and lays the foundation for responsible compensation practices.

Pay Transparency Directive: How to Prepare