Calculating the Gender Pay Gap Metrics – Additional Guidance Published

Since the publication of the Gender Pay gap Regulations, there has been some confusion about how to approach the calculation of the Gender Pay Gap metrics.

In May 2022 the Department for Children, Equality, Disability, Integration and Youth published its guidance on how employers can calculate the Gender Pay Gap in their Organisation, and this guidance has now been updated and can be accessed here.

Some key clarifications include:

Reduction in headcount
Initially, organisations with 250+ employees are obliged to report the gender pay gap data. The deadline for this is December 2022. If an organisation reduces its headcount below 250 after their snapshot date in June, they are still obliged to report their data. The employer should be reporting on those employed on the snapshot date using the data for the previous 12 month period (June 2021 – June 2022).

Bonus payments including shares
Further guidance has been provided on how to report bonus payments and when adjustments are required. Annual bonus payments are straightforward given they are within the 12 month reporting period. Additional monthly payments, such as commission, earned in the 12 month period should be included in the hourly rate calculations.

However, if an employee receives a payment that relates to a timeframe longer than the reporting period it should be adjusted to calculate the amount relating to the reporting period only.

Also, if the employee receives shares as part, or in full, of their bonus payment, it should be included in the data based on the value it was given to the employee and at the value of the share when it was issued.

Statutory leave payments
In the original guidance note, statutory pay, such as maternity leave, was not included given the employee is not at work nor are they available to work. However, guidance published by the Department of Children, Equality, Disability, Integration and Youth stated that these payments should be included.

The latest information states the preferred approach to calculate the data for any employee in receipt of statutory payments is to use the notional number of hours that the employee would have worked had they not been on leave.

Pension contributions
The data used to calculate the hourly rate should be that before deductions at source, i.e. before tax. If payments, such as pension contributions, are taken before tax they should be included. Any payments taken from the net salary should not be included.

Employment status of employees
The employment status of employees as of the snapshot date should be noted; full-time, part-time, temporary, contract. The guidance provides details on whether they should be included and if so, how the data of each should be reported.

The Government’s Frequently Asked Questions document has also been updated and can be accessed here.

If your organisation needs any support capturing, calculating and analysing your gender pay data, please get in touch with our expert-led team at Adare Human Resource Management.