Guide

Joint pay assessment and the 5% rule.

Simona BernatavičiūtėFounder · Compensation and pay equity consultant

Published October 20, 2026Updated October 20, 20266 min read

A joint pay assessment is the review the EU Pay Transparency Directive requires when a pay gap between women and men in a category of workers reaches 5% and stays unexplained. It is carried out with your workers’ representatives, it has a fixed content, and it ends in measures to remove unjustified differences. This guide covers when it is triggered, what it must contain, and how to avoid reaching it unprepared. It builds on the gender pay gap analysis you report under Article 9.

When it is triggered

Article 10(1) applies to employers who report under Article 9, which means employers with 100 or more workers. They must carry out a joint pay assessment, in cooperation with their workers’ representatives, when all three of these conditions are met:

The pay reporting shows a difference in the average pay level between female and male workers of at least 5% in any category of workers.
The employer has not justified that difference on the basis of objective, gender-neutral criteria.
The employer has not remedied the unjustified difference within six months of the date it submitted the pay reporting.

Three details are easy to miss. The test is per category of workers, so a low organisation-wide gap does not protect you if one category is at 6%. The threshold is “at least 5%”, so exactly 5% counts. And the conditions are cumulative: a documented justification, or a correction made in time, means no assessment is required for that difference.

The six-month window

The clock starts on the date you submit the pay reporting. If you submit on 7 June 2027, the window to remedy an unjustified difference closes on 7 December 2027. Remedying usually means pay adjustments, which take budget decisions, so in practice the window is shorter than it looks.

The better approach is to calculate the gap per category before you report. Any category at 5% or more then gets its justification or its correction before the report goes out, not during the six months after.

What the assessment must contain

Article 10(2) says the assessment aims to identify, remedy and prevent differences in pay that are not justified on objective, gender-neutral criteria. It must include:

An analysis of the proportion of female and male workers in each category of workers.
Information on average female and male pay levels and complementary or variable components for each category of workers.
Any differences in average pay levels between female and male workers in each category.
The reasons for those differences, on objective, gender-neutral criteria, if any, as established jointly by the workers’ representatives and the employer.
The proportion of female and male workers who benefited from any pay improvement after returning from maternity or paternity leave, parental leave or carers’ leave, if such an improvement occurred in their category during the leave.
Measures to address differences in pay that are not justified on objective, gender-neutral criteria.
An evaluation of the effectiveness of measures from previous joint pay assessments.

Note point 4: the reasons are established jointly. The employer cannot simply assert them; the workers’ representatives have to be part of that finding.

What happens after

You make the assessment available to workers and their representatives, and send it to the national monitoring body. The labour inspectorate and the equality body can ask for it (Article 10(3)).
You remedy the unjustified differences within a reasonable period, in close cooperation with the workers’ representatives (Article 10(4)).
The measures must include an analysis of your existing gender-neutral job evaluation and classification systems, or the creation of one, so that pay discrimination on grounds of sex is excluded (Article 10(4)).

That last point is worth reading twice. If you reach a joint pay assessment without a job evaluation system, you will be building one anyway. Our guide to work of equal value explains what that involves.

If you have no workers’ representatives

Article 3(1)(m) refers to workers’ representatives as defined by national law and practice. The Directive’s recitals add that where there are none, workers should designate representatives for the purpose of the joint pay assessment. How that works in your country depends on the national law that transposes the Directive, so check it early: designating representatives takes time you will not have inside the six-month window.

What counts as a justification

The Directive asks for objective, gender-neutral criteria and leaves the detail to national law and case law. In practice a justification is credible when it is documented before the question is asked, applied to women and men in the same way, and supported by evidence, for example a performance rating with a defined process behind it, or a market premium with market data.

It is weak when it relies on factors shaped by gender, such as negotiation or uninterrupted service, or when it is reconstructed after the gap appears. Our guide to the adjusted and unadjusted pay gap shows how to test whether your reasons actually explain a gap.

How we help

Every grade is labelled by its gap: within tolerance below 5%, borderline from 5% to 10%, and exceeds threshold at 10% and above.
Where roles in the same grade are paid 5% or more apart, HR records whether the difference is justified or corrected, with a note. The decision carries forward to the next run.
When a grade’s adjusted gap is 5% or more, we prepare a joint pay assessment starter pack: the grades concerned, a draft analysis of causes, and an action plan for HR to complete with owners and deadlines. HR reviews and approves every section.

See the full picture on our pay gap analysis page, or book a demo.

Frequently asked questions

Is a 5% gap a fine?

No. A gap of 5% or more in a category of workers is the point at which you must justify or remedy the difference. Only if you do neither within six months of reporting does a joint pay assessment become mandatory. Penalties are set by each Member State under Article 23 and apply to infringements of the equal pay rules, not to the size of a gap as such.

Does the 5% rule apply to our company-wide gap?

No. Article 10 looks at the difference in average pay between women and men within each category of workers. The organisation-wide gap can be high while every category is below 5%, and the other way round.

Do employers with fewer than 100 workers need a joint pay assessment?

Not under Article 10, which applies to employers subject to pay reporting under Article 9. National law can go further, so check the rules in your country.

Who carries out the joint pay assessment?

The employer, in cooperation with the workers’ representatives. The reasons for any differences are established jointly, and the labour inspectorate or the equality body may be asked to take part in remedying them.

This guide explains Directive (EU) 2023/970 in general terms and is not legal advice. The national law that transposes the Directive in your country can add to it, so check the rules where you employ people.