How to Calculate Gender Pay Gaps

Clare Parkinson

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09 May 2019

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If you run a business with over 250 or more employees in the UK, the gender pay gap report should never be far from your mind.

This is because current legislation requires you to release salary details every year.

As a follow up to any report, you should consider what you can do to improve gender diversity across your business, and how to best narrow your gap.

But before you consider all that, you need to know whether it’s a mandatory requirement for your business.

 

Who has to report their gender pay gap?

You’ll need to report if you’re a ‘relevant employer.’

To meet this criteria, you’ll have to have a base of operations is in England, Scotland or Wales. You must also employ 250 or more employees.

Under the Equality Act 2010, remember that workers also count under the report—so remember to include them. You’ll also need to add some self-employed and agency workers.

 

How to report on the gender pay gap

Firstly, familiarise yourself with the reporting deadline. If you’re part of a public sector organisation, it’ll be 30th March.

If you’re part of a business or charity, it’s 4th April.

In the UK, there are certain gender pay gap reporting requirements. More specifically, there are six key metrics to cover:

  1. The difference in the mean pay of full-pay men and women.
  2. Differences in the median pay of full-pay men and women.
  3. Contrasts in mean bonus pay of men and women.
  4. The contrast in median bonus pay of men and women.
  5. The proportion of men and women who received bonus pay.
  6. The amount of full-pay men and women in each of four quartile pay bands.

You must express the first four of those figures as a percentage.

One question we regularly receive is, “Do I need to worry about gender pay gap reporting for group companies?”

If your organisation is part of a group, you must report individually providing the organisation meets the employee limit requirement.

A group that consists of multiple entities that publish reports may choose to report combined figures for the whole group. However, this is not legally required.

 

How to calculate your gender pay gap

The basic gender pay gap calculation is as follows:

  • Mean gender pay gap: deduct the mean female hourly pay rate from the mean male hourly pay rate. Then, divide the result by the mean male hourly pay rate and multiply by 100.
  • Median gender pay gap: deduct the median female hourly pay rate from the median male hourly pay rate. Divide the result by the median hourly pay rate and multiply by 100.
  • Mean bonus gender pay gap: deduct the mean female bonus pay from the mean male bonus pay. Divide the result by the mean male bonus pay and multiply by 100.
  • Median bonus gender pay gap: deduct the median female bonus pay from the median male bonus pay. Divide the result by the median male bonus pay and multiply the resulting figure by 100.

These calculations are just a snapshot of what you need to consider when approaching your gender pay gap. For a full breakdown and support in your calculations, get the support of a Croner Reward expert.

 

Gender pay gap reporting template

You can adapt one from our sample gender pay gap report.

You can also visit our salary benchmarking details for more help.

Of course, while all reports must include the same information, each will be different.

We strongly recommend producing a textual narrative alongside your findings. And you must tailor your notes to the data your company provides.

 

For support producing a gender pay gap report, or dealing with any issues surrounding the procedure, speak to a Croner Reward expert today: 01455 858 132.

 

About the Author

Clare Parkinson has over 20 years’ experience in the Croner Reward business. As Business Manager, Clare leads a team of Reward Consultants who specialise in the delivery of pay and grading related advice, including tailored pay benchmarking and gender pay reports.

Over the years, Clare has contributed to various industry publications on topics such as gender pay, executive remuneration and market pay trends.

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