Once you know who needs to be included in your gender pay gap (GPG) report, the next step is getting the calculations right. That’s where a lot of organisations get tripped up—not because the maths is complicated, but because it’s easy to include the wrong data or apply the formulas inconsistently.
This blog walks you through the six required metrics, how each one is calculated, and what they actually reveal about pay in your organisation. Basically, everything you need to know about calculating the gender pay gap.
What is the gender pay gap?
The gender pay gap measures the difference in average earnings between men and women across an organisation. It is expressed as a percentage of men’s earnings and reflects the distribution of male and female employees across different roles and pay levels.
It is not the same as equal pay. Equal pay relates to men and women receiving the same pay for the same or equivalent work. The gender pay gap looks at overall pay patterns, including representation at senior levels, bonus access, and occupational segregation.
In the UK, employers with 250 or more employees must calculate and publish specific gender pay gap figures each year.
What information must be included in your gender pay gap report?
Your GPG report needs to include six specific pieces of information. To make things easier, here’s a quick overview of each:
| Metric | What it measures |
|---|---|
| Mean gender pay gap | The difference between the average hourly pay of male and female employees |
| Median gender pay gap | The difference between the middle hourly pay rates when you line everyone up from lowest to highest |
| Mean bonus gender pay gap | The difference in average bonus pay between men and women |
| Median bonus gender pay gap | The difference in the middle bonus pay between men and women |
| Proportion receiving a bonus | The percentage of male and female employees who receive bonuses |
| Pay quartiles | The percentage of men and women in each quarter of your pay distribution (lowest, lower middle, upper middle, highest) |
How to calculate the gender pay gap
Let’s go through each step in order so you know exactly how to calculate your gender pay gap.
Step 1: Calculate ordinary hourly pay
For each relevant employee, you need to calculate their hourly rate of pay for the snapshot pay period. This includes basic pay, paid leave, shift premium pay, and certain allowances—things like payments for extra responsibilities, location-related payments, car allowances, and recruitment or retention incentives.
What’s excluded? Overtime pay, redundancy pay, expenses, benefits in kind, and any salary sacrifice benefits don’t count.
- For salaried employees: divide their pay in the snapshot pay period by their working hours in that period.
- For employees with variable hours: use their actual hours worked in the snapshot pay period.
Step 2: Separate employees by gender
Once hourly pay has been calculated, split your employees into male and female groups based on the data in your payroll system.
Worth noting: GPG reporting currently operates on a binary basis (male and female), as defined in the legislation. There’s currently no statutory guidance on how to handle non-binary employees, so handle this area thoughtfully.
Step 3: Calculate the mean and median pay gaps
Now you need to work out both the mean and median pay gaps—and both matter, because they tell different stories.
For the mean, add together all hourly pay rates for men and divide by the number of male employees. Repeat for women. Then apply this formula:
((Mean male pay – Mean female pay) ÷ Mean male pay) × 100
For the median pay gap, line up all male employees from lowest to highest hourly pay and find the middle value. Do the same for female employees. Then apply the same formula using those median figures.
The mean is more sensitive to outliers (a single very high earner can skew it), while the median gives a clearer picture of the typical employee experience. That’s why you need both.
Step 4: Calculate pay quartiles
Pay quartiles show where men and women are concentrated across your pay distribution. Here’s how to produce them:
- Line up all relevant employees from lowest to highest hourly pay.
- Split the list into four equal groups.
- Calculate the percentage of men and women in each quartile.
This is often where the real story is. A lot of organisations find that their lower quartiles are predominantly women, while the upper quartile is mostly men—and that pattern drives the overall gap even when individual pay rates are fair.
Step 5: Calculate bonus pay gaps
Bonus calculations cover the 12 months leading up to your snapshot date. You need to calculate three things:
- Mean bonus gap
- Median bonus gap
- Proportion of men and women receiving a bonus
This covers annual bonuses, commission, profit-sharing payments, and long-term incentive payments—but not ordinary salaries or overtime.
Bonus reporting often highlights structural progression gaps more clearly than hourly pay does. If men are significantly more likely to receive a bonus, or to receive a larger one, that’s worth investigating.
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Worked example: calculating the gender pay gap
Let’s work through a clearer example using 12 employees. In this example, there’s six male employees with the hourly rates of £26, £32, £38, £45, £55, and £90 and 6 female employees with hourly rates of £24, £28, £31, £34, £36, and £42.
1. Calculate the mean
First calculate the mean.
Mean male pay: (26 + 32 + 38 + 45 + 55 + 90) ÷ 6 = £47.67
Mean female pay: (24 + 28 + 31 + 34 + 36 + 42) ÷ 6 = £32.50
Mean gender pay gap: ((47.67 – 32.50) ÷ 47.67) × 100 = 31.8%
At first glance, this looks significant. The £90 hourly rate has a noticeable impact on the average.
2. Calculate the median
Now rank each group separately.
Male (lowest to highest): £26, £32, £38, £45, £55, £90
The median is the average of £38 and £45 which equals £41.50.
Female (lowest to highest): £24, £28, £31, £34, £36, £42
The female median would be £32.50 (the average of £31 and £34).
Median gender pay gap: ((41.50 – 32.50) ÷ 41.50) × 100 = 21.7%
The median gap is notably smaller than the mean gap. This tells us the very high male salary is amplifying the overall average.
3. Rank all employees and create quartiles
Now rank all 12 employees together from lowest to highest hourly pay:
£24 (F), £26 (M), £28 (F), £31 (F), £32 (M), £34 (F), £36 (F), £38 (M), £42 (F), £45 (M), £55 (M), £90 (M)
Split these into four equal quartiles (three employees per group).
The lower quartile would be £24 (F), £26 (M), £28 (F).
- 66.7% female
- 33.3% male
The lower middle quartile would be £31 (F), £32 (M), £34 (F).
- 66.7% female
- 33.3% male
The upper middle quartile would be £36 (F), £38 (M), £42 (F).
- 66.7% female
- 33.3% male
The upper quartile would be £45 (M), £55 (M), £90 (M).
- 0% female
- 100% male
What does this show?
This is where the insight sits. The organisation in question might argue that pay within roles is fair. And that while that might be true, the upper quartile is entirely male, showing a structural imbalance driving the overall pay gap.
Now consider how this might be interpreted at board level:
- A 31.8% mean gap may trigger alarm and reputational concern.
- A 21.7% median gap might appear more moderate.
- But the quartile breakdown reveals the real issue — women are not represented in the highest-paying roles.
If leadership focuses only on whether the “average gap” looks acceptable, they risk missing the structural progression issue underneath.
That’s why gender pay gap reporting is not simply about arithmetic. It is about workforce composition, senior representation, and long-term talent strategy.
When do you need to publish your gender pay gap report?
Your GPG calculations must be based on a specific snapshot date. Your snapshot date depends on your organisation type.
- 31 March: for most public authority employers (schools, NHS bodies, government departments)
- 5 April: for private sector, voluntary sector, and all other public authority employers
After the snapshot date, you have 12 months to publish. While that feels like plenty of time, gathering the data, running the calculations, and writing a meaningful narrative takes longer than most people expect—especially the first time around. It’s worth starting earlier than you think you need to.
Building an internal compliance process
To make sure your data is accurate and your sign-off process runs smoothly, it’s worth having a clear internal process in place when calculating your gender pay gap. Here’s a sensible framework to follow:
- Data extraction and validation: Pull pay and bonus data using the correct snapshot date. Validate headcount, pay elements, and worker classifications against the legal definitions.
- Calculation and sense-checking: Run the six mandatory calculations and cross-check against previous years. Significant unexplained changes should be investigated before the report is finalised.
- Legal review: Your legal team or external advisors should review both the data and any accompanying narrative before submission—especially if your gap has widened.
- Board or senior leadership review: Present the findings to your board or equivalent. This is a good opportunity to agree the narrative that will accompany the report.
- Director sign-off: The named director or equivalent provides the written statement and formally approves publication.
- Publication and submission: Publish on your company website and submit to the government reporting portal before your deadline.
Calculating your gender pay gap with Cintra
If you’re using Cintra’s payroll software, producing your GPG report is straightforward. You can monitor your data throughout the year—not just at the mandatory snapshot date—which gives you a much clearer picture of pay patterns, progress, and any emerging disparities before they become a problem.
Here’s how to generate your report:
- Access the report tab: Open Cintra → Payroll → Payroll Tools → Gender Pay Gap → Snapshot Details.
- Select a data period: From the drop-down list, choose the GPG data extract period you need.
- Save or print: Once the report appears, save or print it as needed.
If you’d like to see how this works in practice, we’d be happy to walk you through the GPG reporting features in Cintra. Book a demo at a time that suits you.
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