Pay Transparency 2026 - What should employers prepare for now?

The objective is to ensure the practical application of the “equal pay for equal work or work of equal value” principle, eliminate unjustified gender pay gaps, and increase transparency in employers’ pay policies.
Beyond legal compliance, the new framework also creates strategic opportunities: transparent pay practices can strengthen employee trust, enhance employer branding, and support competitiveness in the labour market.
Member States must implement the Directive in national law by June 2026, while reporting obligations are expected to apply from June 2027. As Hungary has not yet adopted national implementing legislation, the Directive’s provisions provide a practical starting point for preparation.
Nevertheless, employers should not delay the necessary steps.

Employer actions — step by step

Preparing for compliance will impact several areas. Below is a summary of the key actions to consider:

1. Transformation of recruitment practices

• Pay ranges will need to be included in job advertisements.
• Employers will be prohibited from asking candidates about salary history, helping to avoid “locking in” prior pay levels.
• Job advertisements will need to be drafted in gender-neutral language.

2. Internal pay communication on new foundations

• Employees will be entitled to request information on how their pay compares to the average pay of workers performing the same or equivalent work, broken down by gender.
• Employers will not be permitted to prohibit employees from disclosing their own remuneration.
• Pay and career progression criteria (e.g., performance, experience, qualifications) should be clearly documented and communicated.

3. Review pay structures and HR processes

• Job evaluation frameworks should be established or updated.
• Pay bands should be defined based on objective, gender-neutral criteria.
• Total reward elements (base salary, bonus, allowances, benefits in kind, etc.) should be structured and communicated transparently.

4. Ensure data protection compliance

• Processing of pay data must remain GDPR-compliant.
• Key principles include anonymization where appropriate, purpose limitation, and proportionate data collection and retention.

Reporting obligations — timeline and key milestones

Above certain headcount thresholds, employers will be required to prepare regular reports on gender pay gaps.

Legal consequences

• Where the difference between the average pay of men and women performing the same or equivalent work exceeds 5% and cannot be justified by objective, gender-neutral factors, employers will be required to conduct a pay review and prepare an action plan.
• The burden of proof may shift in litigation: in pay discrimination claims, employers may need to demonstrate that no infringement occurred.
• Member States are expected to introduce effective, proportionate, and dissuasive sanctions, which may include administrative fines, withdrawal of public funding, and exclusion from public procurement procedures.
• Employees must not be subjected to adverse treatment for exercising their rights or raising complaints.

How can Forvis Mazars help?

Implementing pay transparency is a complex exercise spanning tax, employment, and data protection considerations. Our advisory team can support you throughout the preparation and implementation process, including.

• Practical support through tailored, client-specific workshops.
• Review of employment contracts and internal policies.
• Design and validation of job evaluation frameworks.
• Development of pay band policies and remuneration structures aligned with pay transparency requirements.
• Design or review of remuneration and communication policies, including cafeteria, equity-based reward and other incentive schemes.
• Pay gap diagnostics, dry-run reporting and risk assessment.
• Redesign of HR processes and recruitment practices.
• Data protection compliance support (GDPR and Hungarian Data Protection Authority (NAIH) expectations).
• Development of an internal communication strategy for the pay transparency rollout.
• Development of a practical implementation checklist.
• IT support and tooling, including assistance with implementing “pay equity” software solutions.