EU Pay Transparency Directive: The Transposition Deadline Has Passed

The original deadline for the EU Pay Transparency Directive passed on Sunday last (7th June), but the Ireland was one of many members states that has not yet enacted the legislation required

While many Irish employers are familiar with annual gender pay gap reporting requirements, they await the detail required for the next level of reporting due on the transposition of the EU Pay Transparency Directive (2023/970) (the ‘Directive’). The transposition period was due to end in early June 2026, however, it was acknowledged at Government level that Ireland would not meet the 7 June deadline. In the absence of draft implementing legislation at this stage, we are working with employers to prepare for the new regime by reflecting the provisions of the Directive as far as practicable pending formal transposition.

Our combined service offering of consulting, legal and tax transformation is working closely with employers across a wide range of industries, each with unique workforce profiles and pay complexities. Through this work, we have identified the nuances that matter most and the practical challenges different sectors face. Many are seeking clarity on how the new requirements might compare with the existing gender pay gap reporting framework. With both regimes aiming to promote fairness and transparency in pay for employees, it can be easy to assume they operate in the same way. In reality, the obligations in the Directive represent a far more extensive shift towards transparency and an enhanced reporting model.

Where We Are Now: Gender Pay Gap Reporting

Under the Gender Pay Gap Information Act 2021 and its associated Regulations, employers with 50 or more employees must report annually on pay differences between men and women across a range of metrics, accompanied by a narrative noting reasons for gaps identified and the actions being taken to address them.

A new government reporting portal has also been developed, with a number of employers uploading their data on a voluntary basis, indicating that gender pay gap reporting is moving toward a more standardised format.

As the employee‑count threshold has continued to fall (starting at 250 or more and culminating in 2025 at employers with 50 or more employees), this reporting obligation has broadened in scope over the last four years, and for many organisations, it has now become an established and routine part of their annual compliance cycle.

Irish gender pay gap reporting remains primarily a descriptive exercise rather than a corrective one. While employers are required to publish their figures and meet the reporting requirements, the practical and financial consequences for pay gaps or for failing to address identified gaps are limited.

Although the current reporting obligations increase visibility at an organisational level, they fall short of offering transparency at the level of individual roles or exposing the deeper structural factors that drive pay disparities. This is due to change.

What’s Changing: The EU Pay Transparency Directive

The ‘Directive’ goes far beyond the annual reporting we have seen in recent years and aims to embed genuine pay transparency across an organisation’s full employment lifecycle; from recruitment through to pay progression and ongoing pay decisions.

Some of the most notable changes are the enforcement and corrective measures for pay gaps. Where a pay gap of 5% or more, which cannot be objectively justified, persists for more than six months in a category of worker, employers will be required to carry out an assessment process involving employee representatives.

While gender pay gap reporting gives a high-level picture of the organisation’s pay gap, the Directive goes further by introducing concrete transparency and enforcement measures, such as sharing pay ranges during recruitment, enabling employees to request pay information by gender for comparable work, and requiring action (including joint pay assessments) where certain unjustified gaps arise.

Notably, there is also the potential for financial exposure for organisations, as breaches may result in significant financial penalties, legal action, or other enforcement actions. These changes are a marked shift from the relatively low‑risk framework of the current gender pay gap reporting regime.

How We Can Support

While we have yet to see any substantive draft legislation transposing the Directive, we are working with employers in preparing in advance of the legislation based on the rules of the Directive. KPMG is uniquely positioned to support clients on pay transparency bringing together KPMG Consulting, KPMG Law and KPMG Tax Transformation. Our integrated approach is helping organisations understand their exposure, respond to new obligations, mitigate risk of equal pay issues and translate risk into opportunity

We are supporting organisations with early‑stage preparations, from categorising employees, mapping job evaluation criteria, examining recruitment processes, providing equal pay analysis and assessing general readiness. Should you require support or wish to discuss how these upcoming changes may impact your organisation, please do not hesitate to contact our team.