Four in ten European organisations are not yet (fully) prepared for the Pay Transparency Directive

One in five (19%) European organisations list pay transparency among their top five compensation priorities for 2026. Yet only 68% are fully aware of the European Pay Transparency Directive, a directive that all EU Member States must transpose into national law by June 7, 2026, at the latest. Awareness among employees is also limited: only one-third (34%) know what the directive entails and what it means for their rights. This is according to new research by the European HR services provider SD Worx, which surveyed 5,936 HR managers and 16,500 employees across sixteen European countries.

One of the main aims of the EU Pay Transparency Directive is to close the gender pay gap. It requires employers to be transparent about salaries and to take action in cases of unexplained pay differences between genders. Companies with more than 100 employees will be required to report on this. To date, only a few European Member States have transposed these provisions of the Pay Transparency Directive into national law. 

However, all European Member States must transpose the Directive into national law by June 7, 2026, at the latest. It is striking that 66% of employees are unaware of the Pay Transparency Directive and do not know what it means for their rights. This shows that pay transparency is further along at the policy level in many organisations than in the day-to-day experience of employees.

Furthermore, 10% of European managers indicate that they have hardly taken action to comply with the Directive. Nearly three in ten (28%) are partially compliant, while 62% are confident that they have everything in place to comply. Among companies with more than 1,000 employees, that figure is 65%; among companies with fewer than 100 employees, it is 57%.

At the same time, only 19% of organisations offer their employees concrete tools to make pay transparency visible, such as dashboards for internal pay equity. Among SMEs with fewer than 100 employees, that share drops to 14%. 

How do European workers generally view their pay? Nearly three in ten (29%) feel their pay does not match the value of the work they do. About 27% are neutral on this point, while 44% feel their pay is fair. Employees in Ireland (58%), the Netherlands (57%), and the United Kingdom (56%) are particularly likely to feel they are paid fairly compared to colleagues in similar roles. France (35%), Slovenia (35%), and Croatia (36%) rank at the very bottom.

The picture is different among employers: 65% believe they pay their employees fairly for their work. Employers in Ireland and Norway (both 73%), the United Kingdom (72%), and the Netherlands (70%) are the most convinced of this. On average, 13% of European employers admit that they do not pay their employees fairly. 

Although 57% of organisations regularly analyse internal data to identify and address pay gaps, only 39% of employees feel that their organisation is truly committed to addressing this issue. Among women, that figure drops to 36%, compared to 41% among men. Still, a small majority expects pay transparency to increase in the coming years: 53% of women and 51% of men.

The June 7 deadline is fast approaching and the implementation into national law will most likely vary greatly from country to country. Many organisations are therefore still waiting for concrete details. Nevertheless, they can already take steps today. By collecting, analysing, and comparing compensation data now, they can identify potential pay gaps more quickly and take targeted action. This way, organisations not only better prepare for the regulations but also strengthen their position in the labour market. Pay transparency is playing an increasingly important role in attracting and retaining talent: 64% of employees consider it (very) important when choosing an employer. Organisations that prioritise transparency today are therefore building a clear competitive advantage.

SD Worx, the leading European provider of HR and payroll solutions, supports both small and large organisations in addressing their HR and payroll challenges. To stay in touch with employers and employees, SD Worx regularly conducts in-depth surveys across Europe. The analysis of the most recent “HR & Payroll Pulse” survey offers organisations valuable insights to refine their HR and payroll strategies and make them future-proof. 

The survey was conducted between January 27 and February 20, 2026, in 16 European countries (Belgium, Croatia, Finland, France, Germany, Ireland, Italy, Norway, Poland, Romania, Serbia, Slovenia, Spain, the Netherlands, the United Kingdom and Sweden) by the SD Worx Research Institute. A total of 5,936 HR decision-makers and 16,500 employees were surveyed. The results provide a representative picture of the labor market in each country.