Gender Pay Gap Reporting

There are many benefits that result from equality and diversity in the workplace, which is why it’s important for companies to work towards closing any gender pay gaps. Gender pay gaps can be caused by a variety of factors such as unusually high salaries of certain employees, or others having to take a pay cut to balance work with caring responsibilities.

A gender pay gap shows the difference in average pay across all of the men and women in an organisation, industry or country as a whole. It can be driven by the differing number of men and women across all roles. This is not the same as an equal pay comparison which looks at how much men and women are paid for carrying out the same role.

You will find that companies report on both their mean gender pay gap and median gender pay gap. Both of these figures don’t account for age, previous experience or difference in job roles, however the median gender pay gap is most often viewed as the most representative calculation.

A mean gender pay gap is the percentage difference in average pay of men and women across an organisation. This is calculated by adding up all the hourly pay rates for all women employees, and dividing it by the number of women. The same is then done for the men and the difference is compared.

A median gender pay gap is calculated by listing all men and women employees’ wages from highest to lowest, and comparing the number that sits in the middle for each gender. To help explain further, imagine all the women in a workplace standing in one line, from lowest paid by hour to highest, and all the men doing the same in another line. The median gender pay gap is the percentage difference in hourly pay between the woman in the middle of the line, and the man in the middle of the line. Hourly pay used for the calculation includes leave and any shift premiums, but not overtime worked.

A gender pay gap report includes the following figures:

• Mean gender pay gap for hourly pay 
• Median gender pay gap for hourly pay
• Mean bonus gender pay gap 
• Median bonus gender pay gap
• Proportion of men and women receiving a bonus payment
• Proportion of men and women in each hourly quartile band (a pay quartile is calculated by listing the hourly rates for everyone across a business, then dividing them into four equal sized groups. The percentage of men and women in each group is then calculated).

In addition to the above figures, companies provide a written statement that’s signed by a senior employee confirming that all calculations are accurate. This may also include a narrative of why a gender pay gap is present and what they intend to do to try to close it.

Once the report is complete, it needs to be published somewhere accessible on a company’s own website and on a government website for anyone to view.