Calculating and comparing average basic pay and average total earnings for equal work groups: calculating pay gaps
You should review the pay comparisons to establish any gender pay gaps, and decide if any pay gaps are significant and need further investigation.
As a general guide, any differences of 5% or more, or 3% or more if there is a pattern of gaps favouring one sex, will require exploration and explanation. So, if any of the checks reveal either:
- ‘Significant’ differences between the average basic pay or average total earnings of men and women performing equal work (any differences of 5% or more), or
- Patterns of basic pay difference e.g. women consistently earning less than men on average for equal work at most, or all, grades or levels in the organisation (differences of 3% or more)
… then further investigation is needed.
You should be aware, however, that any pay difference, even when less than 3 % or 5%, may be open to legal challenge.