If you're running a business in the EU, here's the reality: The EU Pay Transparency Directive goes live in less than a year. It’s not optional. And it’s about more than compliance - it’s about whether your employees believe they can trust you.

Done well, pay transparency can strengthen morale, improve retention, and build trust. Done poorly, it can damage your reputation, erode confidence, and increase attrition.

With the deadline fast approaching, smart leadership teams are asking: How can we get ahead of these changes and make pay transparency a win for the business?

To help, we’ve created a step-by-step roadmap to guide your approach. It’s built to help HR, Finance, and leadership teams plan effectively, align stakeholders, and implement pay transparency with confidence - ensuring your pay practices are consistent, your systems are ready, and your managers are equipped to handle tough questions credibly.

The roadmap is designed to unfold over a year but can be accelerated if you’re under time pressure. So let’s dive in!

The Roadmap to EU Pay Transparency

There are two key categories of work involved:

Part 1: Diagnosis & Remediation

This is where you set the foundation for transparency by understanding your current state:

• Are there pay gaps that are out of compliance with the Directive (i.e. greater than 5% per job category)?

• How explainable is current pay? Is it consistent? Can you justify how pay decisions are made?

• Are there outliers and legacy pay scenarios that need to be cleaned up?

• Are systems and data ready for scrutiny?

• What do you want to stop, start and continue in terms of pay setting?

• What do you want the pay-setting and progression policy look like going forward?

Part 2: Implementation & Governance

Once your house is in order and you know how you want pay-setting and progression to work going forward, this is where you embed transparency in processes:

• Policies are applied consistently

• Managers are trained

• Employees are communicated with clearly and effectively

• Systems are in place to track and sustain fairness over time

Let’s Go Step By Step:

Step 1: Set Foundations

The first step is all about setting a solid groundwork for your pay transparency journey. This means getting clear on your legal obligations, understanding your current pay data landscape, and aligning leadership. Now is the time to review relevant legal requirements, gather essential pay and job data, and form a project team that includes HR, Finance, IT, and Compliance. It’s also critical to ensure C-suite awareness and support, as leadership buy-in will be key to driving accountability and change. By the end of this stage, you should have a shared understanding of what’s required, where your data lives, and who’s responsible for what.

Resource: The Case for Pay Transparency: 5 Business Benefits CEOs Can’t Ignore

Step 2: Understand the Current State

Before you can move forward with confidence, you need a clear-eyed view of your current pay landscape. This stage is about identifying where gaps exist and why. Start by defining job categories of equal value, then conduct a robust pay gap audit - flagging any discrepancies greater than 5%, analyzing root causes, and documenting defensible gaps. Where gaps can’t be justified, develop a remediation plan, including cost estimates and timelines. You’ll also need to assess whether your existing systems can support the reporting and tracking requirements ahead. This step ends with alignment at the executive level on your findings and your proposed roadmap for remediation.

Resource: DIY Guide: Conducting an EU Pay Transparency Pay Gap Audit

Step 3: Design the Future Pay Model

With your current state understood, the next step is to define what your pay model should look like moving forward. This is the time to make conscious decisions about what to stop, start, or continue—and to embed those choices into a clear, fair, and transparent pay-setting and progression policy. Build out compensation structures, including salary bands, bonus logic, and benefits, ensuring these align with both internal fairness and external market benchmarks. Engage employee representatives to test assumptions and refine job categories based on real feedback. Finally, secure approval from senior leadership to lock in both the policy and any remediation commitments. This step sets the tone for how pay transparency will operate in practice going forward.

Step 4: Manage the Roll-out

With your future pay model defined, it’s time to operationalize it. Step 4 is all about setting up the infrastructure and processes needed to roll out pay transparency consistently and compliantly. This includes finalizing disclosure templates, launching systems to track pay gaps and manage reporting data, and enabling managers to confidently handle pay conversations. Equip them with tools like scripts, calculators, and training. Just as importantly, communicate with employees through FAQs, live sessions, and toolkits to build understanding and trust. By the end of this stage, your organization should be ready to implement pay transparency in real-time scenarios—whether during hiring, promotion, or public reporting.

Step 5: Execute and Oversee

The final step is about turning your plans into lived experience—and sustaining them. With systems and policies in place, begin applying them in real pay decisions across the business. Conduct regular checks to ensure practices remain aligned with the latest legal guidance in each jurisdiction. Use dashboards to review pay analytics and disclosure metrics on a quarterly basis, and gather employee feedback through pulse surveys to understand how pay transparency is being perceived. Success at this stage means more than compliance—it’s about achieving credibility. Employees should not only receive disclosures on time, but believe that pay practices are genuinely fair.

A Practical Tool for HR Teams

To make this process easier, we’ve created a Google Sheets template that HR teams can use to manage the project.

This includes:

• A timeline of key actions and milestones

• Tasks organized by workstream (Policy, Systems, Stakeholder Engagement)

• Status tracking and ownership fields to support project governance

Click here to access the Roadmap Template (Make a copy to customize for your organization)