What counts as “pay” under the EU Directive?

The Directive takes a broad view of “pay.” Base salary is only one part of the picture — employers must also include bonuses, allowances, and non-cash benefits such as company cars or stock options.

For reporting purposes, this means looking beyond contracts to consider the full package employees actually receive.
 

The goal of the Directive is to ensure comparisons reflect total compensation, not just headline salaries.

Included in the definition of pay:

• Base salary (adjusted for FTE if needed)
• Bonuses and commissions
• Allowances, e.g. travel, meals, hardship or relocation pay
• Non-cash benefits, e.g. company car, stock options, housing support, private healthcare
• Overtime pay
• Other financial benefits linked to performance or role

May vary by national implementation:

• Expense reimbursements
• Redundancy or severance payments
• One-off discretionary or “goodwill” bonuses

These grey areas are still being clarified at country level, and employers should track local updates closely.

Earned vs contractual pay: Another open question is whether reporting should reflect contractual salary or actual earned pay (which can be affected by absences, leave, etc.). Most experts recommend contractual pay for consistency, but local laws may specify otherwise.

To prepare, employers should build as complete a picture as possible when mapping pay data internally. That means capturing not only base salary but also variable pay and in-kind benefits.

Producing meaningful comparisons will require:

• A single source of truth for all reward components.
• Consistent treatment of “grey areas” (e.g. expenses, discretionary bonuses).
• Transparency around which elements are included, and why.
   

“Pay” is more than a payslip. By taking the Directive’s broad definition seriously, you can ensure your reporting reflects the real value of reward — and avoid disputes over what has or hasn’t been counted.

This clarity doesn’t just protect compliance. It also strengthens employee trust by showing that everyone is measured against the same, transparent standards.