Pay gap reporting
Remuneration transparency directive and SAP HR and payroll systems
Pay gap reporting is becoming a new responsibility for employers. While at first glance it is a matter of preparing a cyclical report on the gender pay gap, in reality it will be a much larger undertaking for many organizations - involving organizing payroll data, establishing a methodology for comparison and adjusting HR processes. At All for One, we analyze the bill and its implications for HR practice and HR and payroll systems (SAP HR/HCM and SuccessFactors). Based on this, we prepare a solution to support organizations in reporting All for One Pay Gap Kit. We also invite companies to take advantage of the Pay Gap Readiness Check - an analysis to check whether the company is ready for the new obligations.
Pay gap reporting is becoming a new responsibility for employers. While at first glance it is a matter of preparing a cyclical report on the gender pay gap, in reality it will be a much larger undertaking for many organizations - involving organizing payroll data, establishing a methodology for comparison and adjusting HR processes. At All for One, we analyze the bill and its implications for HR practice and HR and payroll systems (SAP HR/HCM and SuccessFactors). Based on this, we prepare a solution to support organizations in reporting All for One Pay Gap Kit. We also invite companies to take advantage of the Pay Gap Readiness Check - an analysis to check whether the company is ready for the new obligations.
For most companies, preparing a pay gap report will not be limited to generating a summary from the HR and payroll system. The key challenge will be to establish a consistent methodology: how to define pay components, how to compare work of equal value and how to assign employees to the categories in which pay gap indicators will be calculated. Only on this basis can data be reliably reported and possible deviations explained – especially if the 5% pay gap threshold, which the bill triggers additional explanatory measures, is exceeded.
According to the EU directive, member countries should implement its provisions by June 2026. The draft Polish law of December 12, 2025 is not yet a binding law, but from the perspective of the HR director, this is the most important moment: the draft shows what thresholds, deadlines and obligations the legislator wants to realistically “insert" into Polish HR and payroll processes.
Who, what and when reports
Of particular importance, the project organizes the calendar and reporting scope:
- Entry into force: planned date is June 7, 2026.
- Who is covered by the pay gap reporting: the reporting obligation applies to employers with at least 100 employees (under 100 – voluntary).
- First report:
- Employers ≥150 employees: for the period 06-31.12.2026, deadline for submission to the monitoring body: by June 7, 2027.
- Employers of 100-149 employees: first report by June 7, 2031.
- Employers <100 employees: opportunity (not obligation) with first report by June 7, 2031.
- Frequency and “standard mode": as a general rule, reporting is to take place every 3 years (≥100 employees) and annually (≥250 employees), with a deadline of March 31 of a given year.
What the report will contain
According to Article 14 of the draft law, the pay gap report (for the previous calendar year) should include information on:
- gender pay gap,
- gender pay gap for complementary or variable components,
- median gender pay gap,
- median gender pay gap for complementary or variable components,
- The percentage of female and male employees receiving supplemental or variable components,
- percentage of female and male employees in each salary range,
- gender pay gap among employees by category of employees, according to the salary resulting from the employee’s personal classification defined by an hourly or monthly rate and supplementary or variable components.
Two layers of information: public and "internal"
In practice, the report will include general data (indicators 1-6) and data by category (item 7). Indicators 1-6 will be made publicly available in an easily accessible and user-friendly way that allows comparisons across employers, sectors and regions. Point 7, on the other hand, acts as the “most important trigger for HR activities" – because it reaches employees and social partners and triggers further clarification mechanisms.
Who gets information about the gap in categories and when
The draft stipulates that the employer shall provide the information in item 7:
- Employees (all) – as a rule, as a summary of results for all categories included in the report,
- company trade union organizations,
- PIP and the Equality Authority – upon request.
The report is a starting point, not a finale – the project envisions the next steps after its submission:
- Additional clarification: the employee, the union, the PIP, the equality body can ask for details if they want to understand where the indicators come from;
- Deadlines: appearing in the draft are, among others, a deadline of March 31 for submission of item 7; a deadline of up to 30 days for responding to an employee’s request for information (Article 8); and a deadline of 14 days for “additional" modes (e.g., release of item 7 for previous years, additional explanations of the report).
5% threshold and pressure for action
For HR, the key is that the project “closes" the mechanics of enforcement: if the report shows at least a 5% pay gap in any category of employees and it is not defensible with gender-neutral criteria, there is pressure for concrete remedial action – and in the short term (we’re talking months, not years).
The practical conclusion: one cannot “wait for the last quarter." You need to build the capacity to monitor, simulate and explain deviations on an ongoing basis – before the 5% threshold is crossed.
We look at the topic of the pay gap more broadly, from the perspective of those responsible for compensation and benefits strategy: not just a "report," but day-to-day support in building and organizing a pay scale based on valuing work
Remuneration regulations versus the idea of "apples to apples"
The draft largely transfers the logic of the directive to the Polish legal system. And this is understandable – the regulations must be consistent with the EU basis.
The challenge begins, however, where the law comes into contact with the practice of accounting for wages: how to count “salary levels," how to treat bonuses and benefits, how to compare work of equal value and – above all – how to avoid the 5% threshold being an “artifact of methodology" rather than a real inequality.
This can be seen well in the process of reviewing the law, questions from employers and clarifications from the Labor Law Department of the Ministry of Labor and Social Policy. A few examples that show that in practice we are comparing not “apples to apples," but often “apples to pears."
- The period for which we count wages, and the moment of payment. If the salary for December is paid in January, the question arises: which year to include the data? In the world of payroll, this is a fundamental topic, because it shifts the results over time.
- Overtime, one-time payments, sickness absences. Should overtime, severance pay, equivalents be included in “wages received" – and where does the employer’s role end and the Social Security benefit begin? Depending on the answer, the same organization may show a “gap" or no gap.
- Hourly pay: normative or actual hours? Simply deciding whether to divide by normative hours or actual hours worked can change the ratio – especially in roles with seasonality or overtime.
- Who counts towards the 100/150/250 threshold? The reporting threshold is not just “headcount as of 31.12." In practice, companies have turnover, part-time, seasonality. If the definition approaches FTE (Full-Time Equivalent), or annual full-time equivalent (FTE) conversion, then the organization may be “100+" on paper or “<100" in conversion.
- Employee categories and the variability of valuation over time. Categories based on valuation make sense – but in the real world, the organization changes the profile of competencies (e.g., today the ability to program, automate processes is key, next year (actually, already now) – the ability to work on data and AI). If we change the weights in valuation or redefine roles during the year, we need to be able to answer the question: which “value model" applies to the report – and how to document it?
That’s why – along with the reporting itself – one of the most important functions to support the company’s handling of the process will be “explaining the reasons for exceeding 5%."
Not as an “excuse," but as a structured process: from the source data, to the counting methodology, to the neutral criteria that make it possible to distinguish real discrimination from the side effects of the way wages are calculated and recorded.
From bill to HR readiness and systems
The bill says what the employer has to do, but does not explicitly say how to operationally prove it. Therefore, after reading the draft, we distinguished two parallel orders: the formal obligations and the operational elements that must sustain them (data, methodology, processes and communication). We grouped the results of this analysis into thematic categories, where we distinguish where the legal requirement ends and HR and systems practice (including SAP HCM and SAP SuccessFactors) begins.
Below are the categories we highlighted.
Framework context and accountability
Purpose of the directive, sense of the proposed obligations
On this topic, the report is only the end of the road. First, the company has to build meaningful comparisons: establish categories in which it is actually possible to talk about “equal work” or “work of equal value.” Only then comes the counting. And when the result shows differences, a third thing is needed: the ability to explain where they come from and which ones are a natural result of the pay rules, and which ones need adjustment. This is the reason why Pay Gap is becoming an operational topic for HR – because it is about specific rules, data and decisions, not just a general statement that “everyone should be treated equally.”
What does this mean in practice?
HR
- Determine what “comparability” means in the company and what the categories of employees will look like.
- Prepare a consistent narrative for the board and managers: what we measure and why.
- Plan internal communication so that the topic does not “blow up” on the day of the report.
SAP, data
- Map out what data are needed for categories and indicators and where they “live.”
- Establish a dictionary of components: what is basic salary and what is supplementary/variable.
- Do a first “dress rehearsal” on historical data.
Consequences and sanctions
The biggest risk doesn’t start in court – it starts when the company can’t answer the simple question “where did the difference come from?”. The bill links new obligations to liability (fines), and on the side of labor claims, it reinforces the reality of seeking compensation and redress. The logic of the directive also remains in the background: the less transparency and evidence of neutrality of criteria, the greater the pressure of litigation.
What does this mean in practice?
HR
- Set the “owner” of the subject: who is responsible for the methodology, who is responsible for communication, and who is responsible for corrective actions.
- Keep a record of risks: where “false gaps” (regulations, bonuses, absenteeism) can arise.
- Prepare a response standard and an escalation path (before there are 100 requests at once).
SAP, data
- Ensure auditability: data sources, dates, definitions and versions of the methodology.
- Design reports so that it is possible to go from an indicator to a list of cases and causes.
- Secure permissions and login access to reports (RODO/small groups).
Foundations of "apples to apples" comparisons
Valuing work
Without valuation, there are no credible categories of employees. And without categories – the report and the conversation about the Pay Gap begin with an argument about who we are comparing with whom. In practice, then, valuation is not an add-on to the Pay Gap, but its “engine”: it organizes positions, roles and responsibilities in such a way that later indicators can be explained.
What does this mean in practice?
HR
- Establish criteria and sub-criteria for performance appraisal and agree on them with social partners (where applicable).
- Build categories of employees based on valuation, not “job names.”
- Ensure stability over time: model versioning and rules for changes during the year.
SAP, data
- Map the valuation criteria in job/role profiles and link them to the salary structure.
- Maintain the mapping: position/role → employee category.
- Secure a history of changes (who/when/why/on what basis the category or profile was changed).
Wage progression
Transparent criteria for salary increases (promotion, competence, performance, change of role) reduce the risk of “discretionary” decisions that are later difficult to defend in the explanation process. Pay Gap isn’t about unifying salaries, it’s about predictability and documenting rules – so that the employee understands what needs to happen for salaries to increase.
What does this mean in practice?
HR
- Describe the criteria for salary increases and make them available to employees in an “easily accessible” manner.
- Link pay decisions to measurable rationale (competency, evaluation, change in scope of role).
- Arrange career paths for key job families.
SAP, data
- Maintain consistency of pay grades and progression rules in the data.
- Provide reporting: who got an increase and why, in what category and in what cycle.
- Ensure versioning of the rules (so that after a year it is possible to reproduce “why yes”).
Input and daily touchpoints of the employee
Pre-employment salary transparency
This is the first moment when the idea of equality “touches the ground”: the candidate is supposed to get information about the salary level (or range) before entering negotiations. For HR, this means sorting out the pay scale and the logic of assigning a level to a position, so that the fork is not discretionary and is defensible with gender-neutral criteria.
What does this mean in practice?
HR
- Establish forks for roles and rules for when a candidate hits the lower/middle/upper range.
- Pair the fork with salary regulations and benefit policies to make the “package” consistent.
- Establish a standard for publishing information in advertisements and in recruiter communications.
SAP, data
- Pair the role and salary level data with the recruitment process (so you don’t rewrite it manually).
- Ensure consistency between job/role data and salary data.
- Capture the version of the announcement as evidence of the process (what, when and in what version was published).
Gender neutrality of the job advertisement
Forks alone won’t get the job done if the ad and recruitment “carry” an implicit bias. It’s not just about individual words, but the consistency of the entire process: from a neutral job title and a neutral role description, to equal criteria for evaluating candidates, to whether requirements and questions at interviews are applied consistently. In practice, the risk arises when the job description “lives its own life” (each recruiter adds something from himself or herself), and the requirements begin to diverge between the announcement, the interview and the real job.
What does this mean in practice?
HR
- Set a standard for ad language and train recruiters so that the rules are applied consistently.
- Stick to one approved version of the job description (so that ads don’t “drift”).
- Control the recruitment process for non-discrimination – not just text.
SAP, data
- Base announcements on central role descriptions and templates in the recruitment system.
- Add quality control (workflow) and record the result in the system as evidence of the process.
- Maintain a version history of role descriptions/announcements.
Employees' right to information
This is the most “sensitive” element of the entire system, because it moves the subject from reports to daily interactions with employees. The bill gives the employee the right to be informed about his individual salary level and average levels by gender for his category, and imposes a timely response on the employer. In practice, this has to be handled process-wise – otherwise HR will start drowning in ad-hoc inquiries.
What does this mean in practice?
Methodological note: the draft law indicates a deadline for responding to an employee’s request of up to 30 days. A practical interpretation of the calculation period also appears in the clarifications of the Labor Law Department of the Ministry of Labor and Social Policy: 12 full months back from the date of application.
HR
- Set up a process for handling requests (who is responsible, what content, what level of detail).
- Establish “safe minimum” information (RODO/small groups) and escalation rules.
- Prepare a standard of justifications based on neutral criteria so that answers are consistent.
SAP, data
- Prepare report/response templates and audit trail (where the numbers came from).
- Secure anonymization/aggregation and data access control.
- Design the handling of requests so that it does not require manual “submission” of data each time.
Personnel training
Even the best data won’t help if the organization doesn’t know how to talk about it. Without training for HR and managers, the clarification process will be an improvisation – and improvisation in the compensation area usually ends up escalating, not calming. Training, then, is the “quiet” element of compliance: it builds a common language, rational expectations and a consistent response.
What does this mean in practice?
HR
- Identify groups to be trained: HR, managers, recruiters, social partners.
- Prepare interview scenarios: how to explain categories, indicators and criteria.
- Incorporate training into onboarding and management cycles so that knowledge is not a one-off.
SAP, data
- Conduct training and confirmation in the training system (with proof of completion).
- Keep access to materials (FAQs, answer templates) in one place.
Report and "moment of truth"
Reporting to the monitoring body
This is an “external channel” that turns internal analysis into a formal obligation. The bill specifies the rules for electronic reporting, deadlines, and that the report is to be prepared in a tool provided by the state. In practice, auditability becomes key: where the numbers came from, what the definitions were, and whether the result can be reproduced.
What does this mean in practice?
Methodological note: in the clarifications of the Department of Labor Law of the Ministry of Labor and Social Policy appears the counting of thresholds in terms of full-time equivalents(FTE), which in practice changes the answer to the question “do we already have 100/150/250?”.
HR
- Determine the owner of the report and the approval path (including consultation with social partners where required).
- Pair the report methodology with payroll and category definitions to make the result repeatable.
- Plan a “preparation calendar” – the report is not created in a week.
SAP, data
- Build a data pipeline: an HR module, a payroll module, and, where needed, a financial module.
- Include data that arise only on the payroll (overtime, absences, adjustments).
- Prepare export/format under the monitoring body tool (electronically, according to the project).
Annual pay gap
Everything leads to the “moment of truth”: whether a gap appears in any category at a level that triggers additional procedures. And here the topic of methodology comes back: the 5% threshold can be a signal of inequality, but it can also be a signal of ill-defined categories or an incorrectly adopted counting methodology according to the bill. Therefore, the organization must be able to both counter and clarify – quickly, factually and on the data.
What does this mean in practice?
HR
- Treat 5% as a process alert: run a root cause analysis right away, not after “closing the year.”
- Have a catalog of neutral criteria to justify differences (this realistically shortens and calms conversations).
- Plan remedial actions and how to work with employee representatives, if needed.
SAP, data
- Monitor performance during the year, not just after closing.
- Provide a quick “drill-down”: from categories → to components → to cases.
- Keep definitions consistent (so that “same” always means “same”).
Implementation schedule
The most common mistake is thinking that implementation can be done “in six months before the first report.” In practice, it’s not the counting itself that takes time, it’s getting the foundations in order: valuation, data, compensation structure and response processes. That’s why it’s a good idea to build the schedule backwards: from reporting dates, to deadlines for providing information, to when you need to have the methodology ready.
What does this mean in practice?
HR
- Arrange a 6-12 month plan: valuation → data → report sample → adjustments → communication.
- Distribute responsibilities: HR, Payroll, controlling, IT, and bylaws owners.
- Plan a “communication test”: how we answer questions before they are mandatory.
SAP, data
- Run the “source of truth”: component/benefit dictionary + counting rules (common to report and response).
- Start handling requests: workflow, templates, auditing, and anonymization for small groups.
- Run reporting: category monitoring (5% alert) + export to authority tool.
All for One Pay Gap Kit
We are analyzing the draft law of December 12, 2025 regarding pay gap obligations. In our opinion, it still lacks several key resolutions. In particular, it does not yet determine which body will act as the monitoring authority, or what format and scope of data will apply to the IT tool for data exchange. Above all, it does not resolve the rules for assigning pay components to the correct reporting periods, the treatment of absences and benefits for absenteeism, how to calculate hourly pay, or how to deal with changes in employee categories over time.
Regardless of this, we are already conducting analytical and design work in order to be prepared for various variants of solutions that may be adopted in the law or implementing acts. We assume that the law will enter into force by June 7, 2026 at the latest, in accordance with the deadline indicated in the directive. Key issues should be clarified in the coming months, including the designation of the monitoring body and the scope and structure of the reported data. In the same time horizon, we will provide an offer for the implementation of the All for One Pay Gap Kit solution for SAP systems (SAP HCM/HR, SuccessFactors ECP and hybrid solutions), based on the most likely regulatory scenarios.
The All for One Pay Gap Kit will support the organization in this area, so we are looking at the topic more broadly, from the perspective of those responsible for compensation and benefits strategy: not just a “report", but daily support in building and organizing a pay grid based on the value of work (along with benefits) – so that the work done “under the pay gap" strengthens the Total Rewards area on a daily basis, rather than ending with just a report.