Pay transparency: what UK employers need to know in 2026

Pay transparency is a hot topic right now. The UK government launched its call for evidence document on pay transparency in April 2025, with the aim to reform equality laws in relation to equal pay and pay transparency obligations and processes. In 2026, the conversation for business leaders is no longer about whether to be transparent about pay, but rather how to achieve that goal.

Pay transparency is how openly a company shares information on what they pay employees. This covers pay structures, salary ranges, and the decision-making processes that lead to all of this.

The most basic pay transparency information includes:

• Explaining how pay decisions are made.
• Letting employees discuss pay without limitations.
• Publishing salary ranges in job adverts.
• Reporting any pay gap data.

More advanced pay transparency involves full visibility of pay bands and criteria across all levels of the organisation. 

Historically, the UK has taken more of a backseat approach when it comes to pay transparency than other EU countries – but that is changing fast. Three key developments have pushed this topic to the top of the agenda:

• The EU pay transparency directive, which takes effect from June 2026.
• The UK government’s call for evidence on pay transparency.
• The proposed Equality (Race and Disability) Bill.
• Equality action plans, under the Employment Rights Act 2025.

Put together, these four developments point in one direction – that of providing in-depth scrutiny, increased reporting, and rising employee expectations around fairness where pay is concerned.

For HR leaders, the challenge is about aligning pay transparency with a wider workforce strategy, including dealing with redundancies, organisational restructuring, and outplacement services.

• The UK government’s call for evidence

In April 2025, the government launched a consultation on pay transparency measures, seeking out an array of evidence and views on the existing equal pay framework to better understand how the law currently operates and to inform equality law reform. Since March 2008, equal pay claims have exceeded 10,000 a year; among the highest numbers of complaints across all employment tribunal jurisdictions.

The consultation has explored:

• The banning of salary history questions.
• The requirement to have salary ranges within job adverts.
• The need to strengthen the rights of employees asking for pay information, and receiving honest answers, without fear of reprisals.

While it’s still early days, and isn’t law yet, it does signal a strong intent towards better pay transparency. Those employers who wait for legislation to kick in will find themselves behind the curve with employee expectations and competitors.

• Equality (Race and Disability) Bill

One move forward is the government introducing ethnicity and disability pay gap reporting for businesses that employ over 250 people, with the aim of addressing pay disparities and enhancing transparency. This builds on existing requirements and significantly raises the bar for data transparency and accountability.

• Equality action plans from the Employment Rights Act 2025

Large businesses will be required to publish equality action plans, which set out steps that address pay disparities, measurable targets, and progress updates. It’s also on track to improve gender equality by forcing major companies to set out how they address the gender pay gap. The act is also designed to ensure that workers get fair pay for a fair day’s work.

There is no legislation currently in the UK on pay transparency, but there are moves towards this happening. Below is a clear breakdown of the current legal framework in the UK:

• Gender pay gap reporting is mandatory. It applies to UK employers with over 250 employees and annual reporting is required.
• Equal pay is legally required: both women and men must receive equal pay for equal work. This is set out within the Equality Act 2010.
• There is no legal requirement to publish salary ranges, but watch this space as this is currently under consideration by the UK government.
• Employees have the right to request pay information for discrimination cases; this is supported by guidance from the Equality and Human Rights Commission.

So to sum up so far, pay transparency isn’t fully mandated in the UK yet, but the legal framework supports it and further regulation is looking more and more likely.

Section 77 of the Equality Act 2010 is often overlooked, but it’s a vitally important element when it comes to UK pay transparency. It says:

• Employees are allowed to talk to colleagues about their pay if the purpose is to find out whether there is pay discrimination.
• Employers can’t enforce contractual clauses that prevent this.

This sort of discussion surrounding pay is protected if it’s aimed at uncovering potential discrimination based on characteristics such as gender, race, or disability. Examples of these could be enquiring from a colleague in a similar role what they earn or comparing salaries to check for unequal treatment.

However, section 77 doesn’t offer total transparency. Employers can still protect confidential business information and discourage the general sharing of pay grades, but they can’t override the legal right to discuss pay to identify discrimination.

For HR teams, the reality is that pay transparency is already happening, even if it’s on an informal basis and whether companies support it or not. Organisations need to face the issue of whether they’re prepared to deal with what employees uncover when chatting about pay.

This directive comes into law across EU member states on 7 June 2026. As the UK is no longer a member of the European Union, this directive only applies to those UK companies, with over 100 members of staff, that have employees working in one of 27 EU countries, which include Ireland, France, Spain, Portugal, and Germany.

The key requirements are that:

• Salary ranges must be disclosed to potential candidates.
• Employees can request pay information.
• Employers cannot ask a worker about their salary history.
• From June 2027, mandatory gender pay gap reporting for companies with over 100 employees will come into force.
• Employers will be required to carry out formal joint pay assessments where gender pay gaps exceed 5% and can’t be justified or resolved.

For the UK, post-Brexit, the strategic implication is that many organisations are already choosing to standardise their systems globally rather than run separate systems. This means that the directive is already influencing UK practice, even though it’s not legislation that directly affects UK workers.

While these terms are often interchanged, they are distinct from one another.

• Pay transparency has a broader organisational approach, with an openness about how pay is set and communicated to staff.
• Equal pay is a legal requirement, and is about paying men and women equally for equal work.

So while you can comply with equal pay law with no pay transparency, it’s increasingly seen as a risky path to take.

Recent UK data highlights why this is an issue that’s picking up pace in the business world:

• The UK’s average gender pay gap in April 2025 among full-time employees stands at  6.9%, down from 7.1% the year before. This means that, on average, women earn 6.9% less per hour than men.
• Among all employees, including part-time, the gender pay gap was 12.8% in April 2025, down from 13.1% the previous year.
• According to an estimate from the Chartered Institute of Personnel and Development (CIPD), around 33% of UK job adverts don’t include salary information.
• Research from People Management highlights the fact that poorly explained or opaque pay decisions lead to damage to staff engagement, an undermining of trust, and an increase in turnover.
• On the other hand, additional CIPD findings linked good pay transparency to improved trust, employee engagement, and retention, with employers citing benefits such as stronger employer brand and better talent attraction.

Pay transparency is often thought of as a tick box exercise and compliance issue, but its impact is strategic.

• Improves trust and engagement.
• Strengthens the company brand.
• Reduces the risk of discrimination claims.
• Leads to better hiring outcomes.

• If handled badly, disparities can be exposed out of context, leading to internal conflict.
• Pressures behind pay inflation.
• An increased administrative burden.

Pay transparency has a direct impact on how workforce change is experienced.

Transparent pay structures help to justify how decisions around selection are made, employees are less likely to perceive unfairness, and the risks of any legal challenges are reduced.

Clear communication about pay and severance builds trust, while the company’s reputation remains intact during any difficult job transitions.

Employees who understand market pay, and what to expect, are better positioned during the outplacement process, while career coaching can align expectations with reality.

At Careerminds, we play a critical role, ensuring transparency is not just internal, but extends into how members of staff leave the business.

1. Carry out an audit of your current pay data

Identify any pay gaps across gender, ethnic, and disability groups, and understand the root causes of the pay structure within your organisation.

2. Review pay structures

Questions to consider are ones such as, “Are salary bands defined and consistent?” and “Are all pay decisions documented?”

3. Remove or review pay secrecy clauses

This is to ensure complete compliance with Section 77 of the Equality Act 2010.

4. Decide on your transparency level

How transparent do you want your organisation to be with regards to pay? Will it be job ads only, internal ranges, or full visibility both internally and externally?

5. Upskill managers

Provide training for managers on pay transparency requirements, so they are familiar with all sides and can confidently explain pay decisions to members of staff.

6. Prepare leadership for employee questions

This includes the training mentioned above, and is especially vital when it comes to the fairness of pay and career progression salaries.

7. Align it all with EU requirements, if applicable

This is relevant for organisations that employ people from EU countries.

8. Integrate into redundancy and restructuring plans

This is to ensure that pay transparency is consistent across the employee lifecycle.

While it’s not yet a legal requirement for businesses to state a salary or salary range within a job advert, there’s an increasing call to do so. This is so candidates have a rounded idea of what the job entails, along with an understanding of whether the salary is right for them. Most job seekers have a rough idea of what salary they need to earn to fit in with their lifestyle.

Job title: HR Advisor
Location: London (hybrid)
Salary: Competitive

About the role:
We are seeking a proactive HR Advisor to support our growing team. You will provide generalist HR support, including employee relations, recruitment, and performance management.

Requirements:

CIPD Level 5, or equivalent

3 years of HR experience

Strong communication skills

This advert is problematic because stating a “competitive salary” doesn’t mean anything. Competitive against what? It can undermine trust and perceived fairness while wasting the time of both the employer  and the applicant. However, this type of advert is perfectly legal in the UK as there is currently no requirement to include salary information in job adverts .

Job title: HR Advisor
Location: London (hybrid)
Salary: £39,000 – £45,000 per annum, depending on experience

About the role:
We are seeking a proactive HR Advisor to support our growing team. You will provide generalist HR support across employee relations, recruitment, and performance management.

Key responsibilities:

Advise managers on HR policies and procedures

Support recruitment and onboarding

Manage employee relations cases with guidance from the HR Business Partner

Maintain HR systems and ensure data accuracy

Requirements:

CIPD Level 5, or working towards

3 years of HR experience

Strong stakeholder management skills

What determines your salary within the range:

Professional qualifications (CIPD Level 5 vs Level 7)

Depth of employee relations experience

Experience supporting organisational change

Benefits:

25 days holiday + bank holidays

Hybrid working (2 days office-based)

Private healthcare

This advert works as it gives clarity of salary from the start, shows fairness, and details what determines the salary range, so applicants can judge for themselves whether it’s worth applying for the position.

A. Partially. Gender pay gap reporting is mandatory for major companies, and employees can legally discuss pay under Section 77 of the Equality Act 2010. However, publishing salary ranges is not yet a legal requirement.

A. Only if they employ staff in EU member states. Otherwise, it doesn’t directly apply, but is influencing UK pay practices.

A. Equal pay is a legal requirement while pay transparency is about openness in how pay is structured and communicated.

A. No, but this is under active government consideration following the 2025 Call for Evidence.

A. Currently they can, but this may change depending on future legislation.

A. Employers with 250+ employees must publish annual gender pay gap data. Check out the guidance on this.

A. This is highly likely. The direction of travel from government consultations and EU developments suggests increased regulation.

A. You should investigate the causes, take corrective action, document any decisions, and seek legal advice if necessary.

A. It exposes disparities, increases accountability, and drives corrective action.

A. This is a contractual clause that prevents employees from discussing pay. Under Section 77, these are unenforceable if discussions relate to identifying whether there has been discrimination or not.

Pay transparency is no longer just about what you publish – it’s about whether your organisation can justify every pay decision it makes.

If your organisation is looking at how pay transparency connects to fair offboarding, redundancy, and outplacement, contact us at the earliest opportunity to find out more.