Adjusted vs unadjusted gender pay gap.

The unadjusted gap

That is the unadjusted gap. It compares all women with all men, whatever their jobs. It is what Article 9 asks you to report, in its mean and median forms, and per category of workers. Nothing is subtracted, controlled for or explained away.

Its strength is that it shows the full picture: if women are concentrated in lower-paid roles, the unadjusted gap shows it. Its limit is that it cannot tell you why.

The adjusted gap

The adjusted gap compares women and men who are similar in the ways that legitimately affect pay: the value of the work they do, and other documented, gender-neutral factors. Statistically it is often estimated with a regression; in simpler setups it is the gap inside groups of comparable work. What remains is the part of the gap those factors do not explain.

The Directive does not define an adjusted gap and does not ask you to report one. It matters for a different reason: where a gap exists within a category of workers, you must either justify it on objective, gender-neutral criteria or remedy it. The adjusted gap is how you test whether your justifications actually hold.

A worked example

A fictional company with ten people in two grades. The grades come from job evaluation, so everyone in a grade does work of equal value.

The unadjusted gap is 27.4%. Inside each grade, women and men are paid within 2% of each other. Almost the whole gap comes from where people sit: four of the five men are in the higher grade, four of the five women in the lower one.

Does that mean there is no problem? No. It means the problem is not unequal pay for work of equal value inside a grade. It is the question of why women are not reaching the higher grade, which is about hiring, promotion and how jobs were valued in the first place. The unadjusted gap is the figure that keeps that question visible, which is why the Directive asks for it.

Which gap triggers a joint pay assessment?

Article 10 looks at the difference in average pay level between women and men within a category of workers. If it is at least 5%, and you have neither justified it on objective, gender-neutral criteria nor remedied it within six months of reporting, a joint pay assessment follows. See our guide to the joint pay assessment.

So the trigger is a raw, within-category figure. Analysing what explains it, in effect an adjusted view, is how you build the justification. In the example above, neither grade reaches 5%, so neither triggers an assessment, even though the organisation-wide gap is 27.4%.

Pitfalls when adjusting

• Controlling for factors that are themselves shaped by gender. Adjusting for part-time status or career breaks can explain a gap away while hiding the reason it exists.
• Using factors you cannot document. A justification has to rest on objective, gender-neutral criteria, which means evidence: a performance rating with a process behind it, a market premium with market data.
• Treating a small adjusted gap as the end of the analysis. It tells you pay is consistent within comparable work; it says nothing about access to that work.
• Reporting the adjusted gap instead of the indicators. Article 9 asks for the unadjusted figures.

How we handle it

We report the unadjusted indicators exactly as Article 9 defines them. Alongside them, we compute an adjusted gap within each grade, after documented, gender-neutral reasons for pay differences, such as a performance rating HR has attested to or a market premium backed by evidence. An adjusted gap close to zero means those reasons explain the difference; a large one means they don’t. The grades come from job evaluation, explained in our methodology.

Frequently asked questions