Gender Pay Gap reporting: What SMEs need to know

Gender Pay Gap reporting is no longer something that can be ignored by Irish SME employers, warns Sally Turner from Xeinadin Ireland.

What began in 2022 with large employers of 250 or more staff now extends, from 2025, to organisations with as few as 50 employees. Under the Act, employers are required to publish gender pay differences using a substantial 20 different metrics concerned with average and median rates of pay and bonus payments.

The report is based on a snapshot date in June, chosen by the employer, and it covers pay in the preceding 12 months. Every employee employed on that date should be included, apart from any employee who does not identify as male or female, who may be excluded from the report.

Within five months of the snapshot date, the report must be published on the company website and uploaded to a government portal currently being developed by the Department of Children, Equality, Disability, and Integration. If the company does not have a website, the report must be made available at the company’s registered office during business hours for the public to view. The employer is also required to explain any negative pay gaps and how they intend to address them.

It sounds simple, but the reality is more complex. Payroll systems normally can’t generate the required information in the right format, leaving most employers with the task of some manual calculations, adjustments, and reconciliations. On top of this, the law requires an explanation for any negative pay gaps, and a statement of how the employer intends to address them. This shifts the process from a tick-box compliance exercise into a test of organisational culture.

How employers should approach Gender Pay Gap reporting:

Step 1: Select a snapshot date in June 2025. A practical choice is the last Sunday in June. If you have 50 or more employees on that date, a Gender Pay Gap report should be completed.

Within five months of the snapshot date, the report must be published on your company website.

 Within the same timeframe, it must also be uploaded to the Department’s new portal, which is likely to be available in September.

The report should include the relevant metrics, a general summary, and an explanatory note if you have any negative pay gaps.

Step 2: Prepare a list of all employees employed on the snapshot date. This list should include part-time employees, those on temporary contracts, and the gender of each employee. Where an employee does not identify as male or female, they can be excluded from the report.

Step 3: From your payroll software, gather pay information for the twelve months prior to the snapshot date, broken down into four categories.

1. First, total ordinary pay. This should include overtime, bonus, and premium payments, but exclude expenses, travel passes, and bike-to-work schemes. Payments for periods outside the calculation window should also be excluded.
2. Second, calculate total bonus payments. This includes commission, incentive schemes, and small benefit payments such as gift cards. Gift cards are generally accepted as a bonus (R&R) payment.
3. Third, total benefit-in-kind.
4.  Fourth, total hours worked.

Step 4: Calculate an hourly rate of pay for each employee. For employees who recently started or unpaid in the calculation period the hourly rate is a rate that fairly represents what they would expect to be paid in a year.

Step 5: Use this data to calculate the report’s required metrics.

Start with the mean (average) differences between male and female hourly rates of pay, between part-time male and female employees, between temporary contract male and female employees, and between bonuses paid to male and female employees. Employees with a zero bonus are excluded from the calculation.

Then calculate the median (middle number between the highest and lowest number in group) differences for those same categories. Again, exclude employees with a zero bonus.

Next, calculate percentage differences. This includes the bonuses paid to male and female employees, excluding employees with a zero bonus and the Benefit in Kind payments to male and female employees, excluding employees with a zero BIK

Finally, analyse quartiles. Sort employees from lowest to highest hourly rate of pay. The first 25% of employees are Quartile 1, the next 25% are Quartile 2, then Quartile 3, and the highest-paid 25% are Quartile 4. Record the gender split within each quartile.

Step 6: Write the Gender Pay Gap report. This must include the metrics calculated, an explanatory note on any negative figures, and some general commentary.

The advisory notes to the Act also makes clear that it applies to organisations, not just single companies. This means employers with multiple companies under their control must report one Gender Pay Gap report for the whole group if it forms one organisation.

This is only the beginning, further obligations will come with the EU Pay Transparency Directive, which will be introduced in Ireland by June 2026.

Gender Pay Gap reporting is here to stay

In summary, Gender Pay Gap reporting is here, and it is unavoidable. Employers can see it as a burden, or they can treat it as a chance to lead the way.

Those who act early will not only avoid compliance pressure but also build stronger, more transparent organisations.

The question is no longer whether to engage with gender pay transparency – but how quickly you choose to make it part of your culture. With the right culture and planning in place, this will be seen as reporting to embrace instead of one to fear.  

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