The directive intends to prevent pay discrimination and to contribute to closing the unadjusted gender pay gap, which was 13 percent on average in the EU (nearly 14 percent in Denmark). Additionally, the directive adds an extra element to the anti-discrimination legislation.
It is PwC’s assessment that the EU directive on pay transparency will have significant consequences for companies in both Denmark and the EU. Most companies will need to train their leaders to answer new and significant questions related to pay. Many companies will have to adapt to new HR processes, develop or update their pay philosophy, pay policy, job architecture and employment contracts and some companies may need to implement new IT systems to manage the data and reporting requirements in the directive.
Though many items are still uncertain, we know that the directive will mean more transparency on pay and that it will take time for the companies to be ready to comply with the new rules.
When will the directive enter into force?
The Pay Transparency Directive establishes a number of minimum requirements in the EU, and member states must transpose these requirements into their national legislation. They must do so no later than 7 June 2026, so there is time for your company to prepare.
There are still many questions about how the requirements will be practically implemented in the Danish legislation. As we observed with the Directive on Shareholder Rights from 2019, it is likely that a pragmatic approach will be taken in Denmark, so the requirements are manageable for companies of different sizes (from companies with hundreds employees to many thousands). The experience from other EU directives is that there may be a period of transition.
PwC will keep you updated on developments and we are ready to help with preparation before the requirements enter into force.
PwC’s recommendations
Your company still has time to prepare for the new rules on pay transparency. However, it takes time to be able to understand and speak openly about how you pay employees. For many companies it will mean new processes, policies, IT systems and management qualifications. There may be pay gaps that you would want to address before reporting on gender pay gap the first time in 2027, based on pay data from 2026.
Pay transparency can increase new and existing employees' trust that their pay is fair and equitable, however, pay says a lot about the employees value in the company and can be a sensitive subject for many employees.
What will pay transparency mean for employees in your company?
What questions will arise and how should managers answer them?
How is your company being reflected in the market?
What story does your company want to tell?
We recommend that your company takes control of the narrative of why you pay as you do. It creates trust and security among employees, and updated pay methods can simplify internal administration.
How PwC can help you
Workshop on how expectations and requirements on pay transparency will affect your company
Design or review of job architecture, pay bands, and associated processes
Design of pay philosophy, i.e. why do we pay as we do
Training of managers in communicating about pay with a focus on messaging and consistency in pay discussions
Process for employee representatives' access to pay information
Review of collective agreements
Changes to related documents (contracts, policies, etc.)
Talk to us about what you want for your company, and we will help based on your company's size, current situation, and needs.
FAQ: Pay Transparency Directive
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Krushan Reddy
