Gender pay gap reporting: What your business needs to know
- Private sector and listed companies
- Voluntary sector
- The public sector
The snapshot dates are:
- 31 March for public sector employers
- 4 April for private and voluntary sector employers
If you are legally bound to report your gender pay gap data and don't, then you are liable to enforcement action from the Equality and Human Rights Commission.
How do I calculate my gender pay gap?
A company with more than 250 employees is legally obligated to report their full gender pay gap data including:
- mean gender pay gap in hourly pay
- median gender pay gap in hourly pay
- mean bonus gender pay gap
- median bonus gender pay gap
- proportion of males and females receiving a bonus payment
- proportion of males and females in each pay quartile
A full explanation of which employees are included/excluded in the reporting can be found here.
What is the difference between a mean and a median?
A mean is calculated as the sum of individual units of data, divided by the number of individual units.
For example, at Werks & Co. there are five employees, earning: £20k, £20k, £25k, £30k and £120k.
For Werks & Co, the mean of pay is £43k.
The vulnerability of mean averages are that they are easily skewed by outlier data points. In the example above, the managing director who earns £120k is taking the workers' average pay way above what the other four typical employees earn.
Another way to consider this is, imagine a warehouse full of packing staff who earn between £20-25k each. You would expect an average of around £22-23k.
If the owner and founder of the company who has a multimillion-pound salary walks into the room and joins the equation, the average goes through the roof and all the salaries of the 1,000 warehouse employees and one wealthy founder creates a mean average salary in the millions.
A median is calculated as identifying the unit number that is midpoint in a series of data.
For example, at Werks & Co we calculate the median by arranging the data units in numerical order and then finding the middle number.
Immediately, we can see this is a much more realistic and true representation of the average salary of all employees at Werks and is not skewed by the large salary of the MD (£120k). Half of the employees earn less than the median and half earn more.
To find out more about how you can calculate the gender pay gap, visit Sage's informative article.