Why transparency could be a game changer
The gender pay gap remains a key issue in the workplace. Despite progress, women in Germany still earn considerably less than men. We want to know—how big is the problem really, and what measures are needed to help solve it?
The new Pay Transparency Act, set to come into force in 2026, will be a major step towards achieving equal pay, and expectations are high.
The gender pay gap in Germany
According to the Federal Statistical Office¹, the unadjusted gender pay gap in Germany was 18% in 2024. Women earned, on average, 20.84 euros gross per hour, while men earned 25.30 euros—a difference of 4.46 euros. This gap has remained unchanged since 2020, but has improved in the long-term (in 2006, it was still at 23%).
The regional and age-related disparities are striking. In eastern Germany, the unadjusted wage gap was just 7%, while in western Germany, it was 19%. The pay gap continues to increase with age. While the pay gap is just 4% for those under 25 years, it reaches an alarming 29% for those between 55 and 59 years. This is often due to family-related career breaks and part-time work, but also reflects an outdated mindset
Unadjusted gender pay gap 18 %
Eastern Germany 7 % Western Germany 19 %
Difference per age group <25 J. 4 %
Difference per age group >55 J. 29 %
Hourly pay women 20,84 € hourly pay men 25,30 €
Adjusted gender pay gap 6 %
Causes of pay inequality
There are numerous reasons for the gender pay gap, including:
⇒ Women are more likely to work in lower-paid sectors and professions, e.g., in social or healthcare services
⇒ They disproportionately work part-time or in marginal employment (mini-job)
⇒ Career breaks due to childcare or other care responsibilities often result in disadvantages in salary or career development
⇒ The limitations of traditional gender roles often pose an additional challenge for women.
Women in leadership positions – Ongoing challenges
Women also face significant obstacles in management positions. Surveys such as those conducted by the Bavarian Federal Office for Statistics² show that many female leaders give up in frustration, or move to a different company. Reasons for this include:
⇒ Colleagues doubting their qualifications
⇒ Lack of recognition of their ideas, which are often adopted by male colleagues
⇒.Challenges such as micro-aggressions or lack of promotions due to gender stereotypes
These challenges make it clear—organizations don’t just have to change salary structures, but also shift the company culture.
The Pay Transparency Act – A route to change?
A key lever to reduce the gender pay gap, and the associated discrimination is the Pay Transparency Act³. It could act as a catalyst for more pay equality if it is continuously developed.
What are the possible positive effects?
Increased transparency creates trust
The law already obliges companies to be more transparent about salaries. Extending the right to information and the full disclosure of starting salaries could help to identify and fight discrimination.
Stronger enforcement
Individuals could better assert their rights with measures such as reversing the burden of proof when pay discrimination is suspected, or a right to collective action.
Mandatory audit procedures
Regular audits of salary structures would force organizations to analyze and correct existing inequalities.
Incentivizing structural change
The law could create incentives for family-friendly working models, and a needs-based promotion of male and female employees in leadership positions—measures that are key components for sustainable equity.
Conclusion: The need for a holistic approach
Closing the gender pay gap requires a combination of political measures, corporate responsibility, and societal change. The Pay Transparency Act can drive structural change to create a fairer working world in which women are not just paid equally, but also have equal opportunities to succeed.
For companies, this requires a clear commitment and consistent implementation. McDonald’s, one of our clients since the founding of Unequity, has taken a pioneering role, as described in the Level Up HR network interview with Yvonne Prang, McDonald’s Senior Director Global Rewards International Operated Markets.
This example shows that when organizations anchor the drive for transformation in their corporate strategy, and put it into practice, they can successfully realize equal pay.
Our offer: We are specialists in Total Rewards internal communication and are your strategic partners for all HR topics. If you are working on a project in your company, get in touch with us.
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