What Counts as an Objective Reason for Pay Gaps Under the EUPTD (And What Doesn't)
June 7, 2026 is the EUPTD deadline. By then, EU employers must be ready to explain any gender pay gaps over 5% they find across their role bands. But what counts as an objective, gender-neutral reason that might help justify these gaps?
This guide walks you through the difference between objective, defensible reasons for pay differences and explanations that won't survive scrutiny.
What is objective, gender neutral criteria?
Objective, gender neutral criteria means you need to be able to point to something measurable, documented, and applied consistently - not something vague, historical, or subjective.
The directive itself points to four key evaluation factors when assessing whether roles are comparable:
Skill and knowledge required
Responsibility and accountability
Working conditions
Effort (physical and mental)
When you justify a pay gap, you're essentially saying: "We pay Person A more than Person B because they differ on one or more of these factors, and that difference is material and documented."
Below are the explanations regulators will listen to. They're grounded in the four evaluation factors above, measurable, and consistently applied.
1. Demonstrably Different Skill or Knowledge Levels
Different pay for different required qualifications, certifications, or proven technical expertise relevant to the role.
Examples:
A chartered accountant vs. a non-qualified finance assistant (the qualification is genuinely required)
A developer with demonstrable expertise in a scarce language (Rust, Go) vs. one without (the skill is directly job-relevant)
A role requiring a professional qualification (CIPD, CFA, legal qualification) vs. one that doesn't
This works because:
It's objective (you can verify the qualification/certification)
It's documented (in hiring criteria, job descriptions, training records)
It's consistently applied (you don't waive it for some people)
It should be noted that the skill or qualification must be genuinely required for the role, not nice-to-have. If you list something in the JD but don't actually enforce it, it's not a valid justification.
2. Materially Different Levels of Responsibility and Accountability
Different pay for roles with genuinely different scope of accountability, decision-making authority, or impact.
Examples:
A role with budget responsibility (e.g., managing a 2 million annual budget) vs. one without
A supervisory or management role vs. an individual contributor at the same level
A role accountable for strategic decisions vs. tactical execution only
A role with risk or compliance accountability vs. one without
This works because:
Responsibility is measurable (budget size, team size, decision scope)
It's documented (org charts, job descriptions, reporting lines)
It correlates legitimately with pay
You do need to be able to point to actual differences in accountability, not just the job title. Two people with the same title but different accountability scopes can be paid differently, but you need evidence the scopes are actually different.
3. Working Conditions: Shift Work, Hazard Exposure, or Unsocial Hours
Additional pay for work that happens under materially different or more demanding conditions.
Examples:
Night shift premiums (legitimate, widely recognised)
Weekend or on-call work (clearly defined and earned)
Hazardous environment allowances (chemical exposure, heat, safety risk)
Travel burden (roles requiring frequent international travel)
Remote vs. office work (only if there's a genuine cost/access justification, although this rationale is increasingly scrutinised)
This works because:
Working conditions are objective (shift rosters, safety data, travel records)
Premiums are transparent and documented
They're consistently applied to anyone in those conditions
The premium must be genuinely earned through the hours or conditions worked, not a one-off discretionary gift. "We pay more for night shifts" works. "We gave this person a retention bonus to keep them on nights" is murkier and depends on documentation.
4. Effort: Physical and Mental Demand
Different pay for roles with materially higher physical or cognitive demands.
Examples:
Roles with high cognitive load (complex problem-solving, decision-making) vs. routine roles
Roles with high emotional labour (customer-facing, complaint handling, safeguarding) vs. back-office
Roles with physical demand (warehouse roles, field roles) vs. desk-based
Roles requiring sustained concentration or high-stress decision-making
This works because:
Effort is measurable (cognitive complexity scales, emotional labour metrics, physical demand assessments)
It's documented (job evaluation frameworks, role assessments)
It's a recognised factor under the EUPTD framework
This is where careful job evaluation matters. You can't subjectively say "this person works harder" without evidence. You need a documented framework that measures effort consistently across all roles and applies it without gender bias. Watch out: emotional labour (common in care, customer service) historically gets undervalued. Make sure your framework values it equally to physical effort.
Job evaluation frameworks vary by country and industry. Use a recognisable standard (Hay, Korn Ferry, or equivalent) to strengthen defensibility.
5. Length of Service and Seniority-Based Pay Progression
Pay progression tied to time in role or organisational level, provided it's consistently documented and transparently applied.
Why this works:
Seniority is objective (it's documented in your payroll and HR systems)
It's based on organisational progression, not subjective assessment
It's consistently applied across your workforce
What does work:
"We have a transparent pay progression framework: Year 1–£X, Year 2–£X+2%, Year 3–£X+4%, etc. This applies uniformly."
"Our organisation has defined levels (IC1–IC5). Each level has a salary band. Person A is IC3, Person B is IC2. Here's the evidence."
Pay progression tied to formal promotion and documented level changes
What does NOT work:
"They've been here longer so earn more" (without a documented framework)
Informal progression that varies by manager discretion
Progression policies that are stated but not actually implemented consistently
Seniority-based pay is recognised across jurisdictions, but you need a documented pay progression scale or level framework to defend it. Some EU countries (Austria, Sweden) have stronger collective bargaining agreements that define seniority increments — reference these if they apply to you.
6. Market-Related Factors (Within the Four Evaluation Factors)
The EUPTD doesn't explicitly recognise "market rates" as a standalone objective justification. However, pay differences may be justified if they stem from genuine differences in the four core evaluation factors (skill, responsibility, working conditions, effort) where those differences are driven by market conditions.
What this looks like in practice:
A role requiring scarce skills (which the market values higher) is justified under Factor 1: Skill and Knowledge
A role with greater responsibility due to market pressure is justified under Factor 2: Responsibility
Higher pay for unsocial hours (where the market demands premium pay) is justified under Factor 3: Working Conditions
What might work:
"This developer role requires proficiency in Rust, which is scarce in the market. We've documented this scarcity and set pay accordingly. Here's our market data."
The justification rests on the skill differential, with market data supporting why that skill commands premium pay
What does NOT work:
"Market rates for this role are generally higher" (without tying it to a specific evaluation factor)
Generic reference to market rates without explaining which factor justifies the difference
"Roles women do tend to earn less in the market" (this describes segregation by gender, not a justifiable pay difference)
When you reference market rates, anchor your argument to one of the four evaluation factors. If your pay gap correlates with gender but not with any measurable difference in skill, responsibility, working conditions, or effort, market rates alone won't justify it under EUPTD scrutiny.
7. Performance Against Documented, Objective Criteria
Different pay based on measurable outputs or performance against pre-set, documented, consistently applied standards.
Examples that work:
Sales commissions (if commission structure is identical and sales opportunities are genuinely equal)
Performance ratings (if the rating system is documented, applied consistently, and free from gender bias)
Output metrics (lines of code, customer satisfaction scores, error rates)
Why this works:
It's measurable and documented
It's applied consistently
It's performance-based, not demographic
What does NOT work:
"They're just a better performer" (without objective measurement)
Manager ratings without a documented framework
Subjective assessments of "potential," "culture fit," or "leadership presence"
Watch out: If your performance ratings show a pattern (e.g., women consistently score lower on "leadership potential" but the same on actual outcomes), that's a red flag. You likely have a measurement bias, not a performance difference.
8. Geographic Location (with Caution)
Different pay for the same role in different geographic locations, if there's a documented policy and genuine cost-of-living or labour market difference.
What might work:
"We pay by geography: London £X, Bristol £Y, Dublin £Z" — provided you can evidence genuine cost-of-living or labour market differences
Multi-country operations: "Dublin salaries are lower than London because local market rates are lower" — with supporting market data
What does NOT work:
"London costs more, so we pay London staff more" (without evidence)
Different pay for remote workers in the same cost-of-living area
Geographic pay variation that coincidentally aligns with gender segregation (e.g., if women cluster in lower-paid regions)
Why this is increasingly scrutinised: If your pay gap correlates with geography, and your geography segregates by gender (e.g., most women work in lower-paid regions), you've got a structural problem, not a geographic justification.
Reasons That Won't Hold Up (No Matter How You Frame Them)
These explanations will fail regulatory or legal scrutiny. Don't rely on them.
"That's just what we've always paid"
“Men are better negotiators" / "Women don't negotiate" / "Some employees negotiated better deals"
"Previous salary history" / "We just hired them cheaper”
"They're in more senior roles because they've been here longer"
"We pay for potential"
“Budget constraints meant we couldn't pay equally" / "We can't afford to close the gap"
"Women apply for lower-paid roles more often"
"Part-timers earn less because they work fewer hours" (you should be comparing hourly pay, not total pay)
"It's industry standard" (without evidence)
"Retention bonuses / golden handshakes"
"Commission structures"
"People knew what they were signing up for"
Your Audit Checklist: The Four Questions
When you analyse your pay gaps, ask yourself:
Is the reason job-related? (Not demographic, not historical, not cultural.)
Does it relate to the four EUPTD factors: skill, responsibility, working conditions, effort?
Is it measurable? (You can point to data, not assumptions.)
Can you produce evidence: contracts, market data, performance ratings, job evaluations?
Is it consistently applied? (Works the same way for everyone in that circumstance.)
Do you apply this reason equally regardless of gender?
Would it survive scrutiny? (Imagine explaining it to a regulator or in court.)
Does your explanation hold up to challenge, or does it sound like you're making excuses?
If the answer to any of these is "no," you've found a gap that needs closing, not justifying.
If you can't measure your pay gaps, you can't explain them. And if you can't explain them, you can't defend them.
At Bridgit Pay, we've built the tools to help you get there. You can't manage what you don't measure, and you can't explain what you haven't analysed. Get in touch to see how we help employers make sense of their data and get ahead of the EUPTD deadline.