The gender pay gap signal of five percent or more only applies to employers who are already subject to the reporting obligation, and even then only for the categories in which the difference actually reaches that threshold. If your company is not subject to the reporting obligation, there is no report, and without a report, no signal arises either. If you are subject to it, it depends on the outcome per job category whether anything is expected of you.
The signal is therefore not a standalone obligation. It is the result of a comparison that is already part of the report: for each category of equal or equivalent work, the average pay of men and women is set side by side. If that difference in a category comes to five percent or higher, without an objective, gender-neutral explanation being documented, the regulation refers to a signal. Only from that moment onwards does a follow-up process start with a six-month deadline.
When it does not affect you
The majority of SMEs are currently outside the reporting obligation because the number of employees falls below the threshold that applies to it. No reporting obligation means no automatic signal: there is simply no comparison that could result from it. This does not mean that pay differences are not then a subject — the information rights of employees apply without a threshold, and an employee can therefore always ask about the pay level of comparable colleagues. But this goes through a different channel than the signal, with a different procedure and a different deadline.
Even within companies that do report, some categories remain outside the signal. If the difference in a category is below five percent, nothing further comes into motion. The report is there, but without further obligations for that category.
When it does affect you
The signal becomes relevant once you meet three conditions at the same time: you are subject to the reporting obligation, the report indicates a difference of five percent or more in at least one category, and there is no objective, gender-neutral explanation for that difference on record. This last point is often what matters in practice: a difference in itself is not a judgment, but the absence of a substantiation means that the difference is treated as a signal.
The size of your organization is not assessed per location but according to the counting rules that apply to the reporting obligation; an enterprise with several small locations can thus still exceed the threshold. Anyone uncertain whether the count in their case applies will find the background to this in the knowledge base with the rules explained per situation.
The role of job classification
Whether a difference of five percent arises depends heavily on how jobs are classified into categories of equal or equivalent work. A rough classification can mask differences or bring them to the fore unjustly; a classification based on objective, gender-neutral criteria provides a more accurate picture. This therefore affects not only the outcome of the report, but also the question of whether a signal actually arises. Employers who are not yet subject to reporting obligations are well advised not to wait until that point: a classification that is already in order makes a later report considerably clearer.
Check where you stand yourself
Whether the signal is a realistic scenario for your company depends on factors that vary by organisation: the number of employees according to the correct count, the sector, and whether or not you fall under a semi-public scheme. A quick way to check this for your own situation is the free compliance check, where you can see in a few questions what currently applies to you and what will apply if you grow. You can do that check your own situation in a few questions.
For those who want to know how the information in the knowledge base and the check has been compiled, this is explained on the page where the information comes from. And for employers who do fall under the reporting obligation and want to see what is needed to properly substantiate a possible signal, an overview of the paid functionality is on the page with the subscription structure.
This explanation describes how the signal is constructed and when it arises; it says nothing about your specific situation. For an assessment of that, you can consult a lawyer or the competent supervisory authority in your country.
Do you want to see based on your own figures whether the reporting obligation and thus the signal applies to you? The quick scan is free and requires no account; you can complete it in a few minutes.