The EU Pay Transparency Directive: 10 questions we were asked – and how we answered

The EU Pay Transparency Directive (EUPTD) is driving a fundamental shift in how organizations report on pay and benefits. With new regulations comes the pressure to consolidate complex data, meet transparency obligations, and future-proof your approach to total reward.

In our recent webinar, Beyond the EU Pay Transparency Directive: How to simplify pay transparency with the right tech, we explored how HR and Reward leaders can use technology to simplify compliance, automate reporting, and reduce admin – whether you operate inside or outside the EU. Benifexers Lyndsey Shaw, VP of Partnerships, and Malin Jonsson, Product Manager, were joined by Linnéa Molin, Chief Advice Officer at Sysarb, a trusted Benifex partner.

Sysarb is an all-in-one pay transparency platform that helps organizations manage everything from job architecture and salary reviews to gender pay gap analysis, pay equity audits, and compliance reporting.

Here are ten of the top questions we were asked – and how we answered them.

#1: What proportion of companies do you see including benefits in their pay transparency reporting today?

Most companies are actively moving in this direction, particularly those with a clear benefits infrastructure in place. While some organizations are still working to bring benefit data into scope, others already use their Total Reward Statements to communicate a complete picture of compensation.

Benefits are a critical role in transparency – especially when comparing employee groups. Platforms like Sysarb help organizations include both direct and indirect compensation, including benefits, into their pay equity analyses and reporting.

#2: How are Benifex defining “indirect” benefits and how should they be considered in pay transparency?

In the context of pay transparency, Benifex’s defines indirect benefits as taxable and monetary benefits that should be included in compensation reporting. While total reward can also encompass non-monetary benefits, these are more challenging to incorporate into direct comparisons.

Conversations with Benifex customers show that organizations take varied approaches to what they include in pay comparisons. Employers have some flexibility to define which elements fall under pay transparency – but clarity and consistency are key.

The Benifex platform also supports the inclusion of indirect, non-monetary benefits to help employers present a more holistic view of total reward when communicating with employees.

To stay ahead of the Directive, organizations should clearly define what’s included in their total reward reporting – and apply it consistently when comparing roles or demographics.

#3: How long does it take to implement the Sysarb platform?

Organizations with around 10,000 employees across 10 countries can typically set up the system in just a couple of weeks. The bigger time investment comes later – in analyzing the data, assessing whether pay is fair, and preparing to explain any differences.

For a full European rollout, we recommend allowing around six months to bring everything together and to ensure it is all addressed thoroughly.

#4 Do steps 1–3 of the Directive apply to all organizations, regardless of size? And would a company with small EU offices still need to report?

Yes, steps 1–3 of the EUPTD apply to all organizations, no matter their size. These measures focus on transparency for candidates and employees, and include:

• Salary range disclosure: Employers must share the initial pay level or range in job postings or before interviews.
• Salary history ban: Employers cannot ask candidates about their current or past salary.
• Right to information for employees: Employees can request their individual pay level, average pay for their job category (broken down by gender), and the objective criteria used to determine pay and progression.

These steps create a baseline of pay transparency across all workplaces, even for those not yet subject to formal reporting.

When it comes to reporting obligations, company size does make a difference. Here’s how the thresholds break down per EU member state:

• 250+ employees in an EU member state: Annual reporting starting from June 7th, 2027
• 150–249 employees: Reporting every 3 years, starting from June 7th, 2027
• 100–149 employees: Reporting every 3 years, starting from June 7th, 2031

These thresholds apply per EU country – not across your total EU workforce. So, if your company has 450 employees globally but fewer than 100 in each EU country, you won’t need to report yet. But your employees in those locations still have the right to request pay transparency under steps 1–3.

Finally, it’s worth noting that the EUPTD does not apply to the UK. The UK has its own gender pay gap reporting requirements, which apply to employers with 250 or more employees and are separate from the EU Directive.

#5: Does Sysarb’s reporting also fully cover Corporate Sustainability Reporting Directive (CSRD) expectations?

Sysarb intends to support CSRD reporting, as the EUPTD covers the equality and pay components required under CSRD. However, CSRD also includes broader sustainability and governance criteria. To prepare effectively for both, organizations should align their data strategy across ESG and people-related metrics.

#6 Will member states define “pay” differently – and will that include total reward or just salary and cash?

Under the EUPTD (2023/970), defines “pay” broadly – but each member state can interpret and apply that definition differently when implementing it into national law.

According to Article 3(c) of the Directive, “pay” includes:

• Ordinary basic, minimum wage, or salary
• Any other consideration – in cash or in kind – that the worker receives directly or indirectly in respect of their employment

This definition encompasses a wide range of compensation elements, including:

• Bonuses
• Allowances
• Overtime pay
• Benefits with a monetary value
• Long-term incentives, if awarded as part of compensation

In practice, member states may apply a narrower or broader interpretation of what counts as “pay.” Employers should actively monitor how each country defines and applies these terms when transposing the Directive into local legislation.

#7 Does Sysarb Analytics account for diversity factors such as age, race, and disability?

Yes – while the Directive doesn’t require reporting on these factors, organizations can include them in their analysis if they support broader DE&I goals. The Directive only mandates reporting by gender and worker categories.

#8 What strategy do you suggest for communicating with employees as the Directive comes into effect?

Communicate clearly, proactively, and transparently. Set clear expectations early – especially around what data employees can access and how you’ll use it.

Your internal strategy should include:

• Explaining the purpose of the Directive
• Clarifying how you assess and structure compensation
• Reassuring employees about how you protect their data and ensure fairness

Equip your people leaders to answer questions confidently, and make sure employees know exactly where to go if they want to request information.

#9 How does this Directive fit in with the UK’s gender pay reporting requirements?

The Directive overlaps with the UK’s Gender Pay Gap reporting in some areas, but it goes further. In the UK, employers report average pay by gender across the whole organization. Under the Directive, you’ll need to break this down by job category, share salary ranges during hiring, and explain how pay progression works.

The EU requirements are broader and more detailed – so even if you’re familiar with UK reporting, you’ll need to prepare for a more comprehensive approach.

#10 Can employees ask HR to justify their pay grade compared to peers under the Directive?

The EUPTD doesn’t explicitly give employees the right to challenge the validity of pay grades. However, it does increase transparency in ways that allow employees to question fairness in pay structures – including how roles are graded.

Employees can request:

• Their individual pay level
• Average pay levels by gender for categories of workers doing the same or similar work
• The objective, gender-neutral criteria used to determine pay and progression

If a gender pay gap of 5% or more exists within a group, employers must carry out a joint pay assessment – including a review of how roles are evaluated and classified.

Even though the Directive doesn’t mention pay grades by name, they play a central role. Grading frameworks define worker categories, justify pay differences, and shape salary ranges during recruitment. While the Directive doesn’t let employees audit pay grades directly, it holds employers more accountable for how they design and apply those structures.

Watch the full webinar on demand

These questions just scratch the surface. For a deeper dive into what the EU Pay Transparency Directive means for your organization – and how Benifex and Sysarb solutions work together to simplify compliance and support long-term transparency – watch the full on-demand webinar here.