The purpose of the pay components workshop is to identify and map all components that make up employee pay, so the analysis reflects total compensation, not base salary alone. The workshop is also used to review the rules, policies, and eligibility criteria behind each component, helping you identify potential gender-related issues both in policy design and in how compensation is applied in practice.

The goal is to map your compensation elements into the PayGap compensation model, so they can be split into meaningful categories for deeper analysis. This structure should also support later mapping from payroll or salary codes into the same pay component groups.

A meaningful pay gap analysis requires more than a comparison of base pay. In many organisations, important differences may sit in bonuses, pension, allowances, benefits, company cars, or other compensation elements. If these are not mapped consistently, the analysis may miss where the gap actually comes from.

This step is also about making practical decisions. Not every component needs to be collected at once. The workshop helps you identify what should be prioritised for the first analysis, and what can be added later if collection is difficult or the impact is likely to be small.

It is important to consider what is required from a legal perspective. The EU Pay Transparency Directive defines pay very broadly. According to the Directive, “pay” includes not only base salary, but also any other consideration, whether in cash or in kind, received directly or indirectly in respect of employment.

This means that bonuses, allowances, benefits, pension contributions, and other elements of total reward should be considered as part of pay. The Directive explicitly highlights that both fixed and variable components, as well as benefits in kind, fall within scope.

The broad definition of pay is also reinforced in the recitals, which clarify that all elements of remuneration, including complementary or variable components such as bonuses, overtime, allowances, and benefits, should be taken into account when assessing pay equality.

For this reason, when preparing your pay components workshop, it is important to take a comprehensive approach and ensure that all relevant elements of compensation are identified and considered in the analysis.

At the same time, each country may transpose the Directive differently and provide more specific guidance on what should be included as pay components. This should always be treated as a starting point - local legal requirements and interpretations should be reviewed and reflected in your final approach.

Before the session, collect an overview of:

If possible, involve someone who understands your payroll structure. Actual data is often stored as payroll or salary codes, so these codes will later need to be mapped into the same pay component groups you define in PayGap.

The mapping file should be used as a practical working tool during the workshop.

Start by listing each component and, where relevant, its local type or name. Then assess it country by country. The template is designed to help you review each component through four practical lenses:

A useful way to work with the file is:

This is exactly the logic discussed in the workshop: if a component is large and not equally available, it should usually be prioritised first. If it is small and difficult to collect, it can often wait until a later phase.

During the workshop, review the main compensation elements used in your organisation.

Base pay is compensation for work performed, typically paid monthly for salaried employees and hourly for production workers. In some cases, hourly rates may be governed by collective or union agreements.

Short-term incentives are usually annual or short-cycle variable awards, often paid in cash and linked to company, team, or individual performance.

Long-term incentives are awards such as equity or multi-year cash plans, designed to reward sustained performance over several years.

Profit sharing distributes a share of company profits based on predefined rules.

Sales bonuses are variable payments linked to revenue, bookings, or quota achievement.

Pension includes pension-related compensation or employer-funded pension amounts.

Allowances include payments such as overtime, phone, meal, transport, shift, or car-related payments. These should be reviewed carefully, especially where local practice may affect whether they should be treated as fixed pay or variable pay.

Benefits may include pension, healthcare, insurance, or other non-cash elements. Most policy-based benefits are assumed to apply broadly, but any benefit outside standard policy should still be documented and reviewed.

The workshop is not only about identifying all pay elements. It is also a prioritisation exercise.

A good first-run approach is to focus on components that:

Small components with limited impact can be added later if needed. This is usually more effective than delaying the entire analysis while trying to collect every minor element from the start.

The recommendation from the discussion was not to mirror hundreds of payroll codes one by one. Instead, create a structure that is detailed enough to explain where the gap comes from, but still practical to maintain. In many cases, this means aggregating detailed local codes into a manageable number of meaningful pay components rather than reproducing every single code in the final model.

The same grouping should later be used when mapping payroll outputs into PayGap. In other words, even if your payroll system only gives you numeric salary or pay codes, those codes should still be mapped into the same pay component structure defined in the workshop.

The type of data you need to use should be aligned with the purpose of your analysis.

There are three practical use cases:

For this reason, it is often useful to start from a contractual understanding of compensation structure, even if actuals will later be required for reporting. It is also easier to explain actuals if you first understand the underlying contractual structure.

Benefits should be valued consistently across the population. If there is no clear internal standard, tax value is usually a practical and reliable starting point, although market value may also be used. The key is to apply the same approach consistently across all employees.

In some countries, benefits that are available to all employees on the same terms and with the same value may be excluded from the analysis. However, this depends on local legal requirements, so it is important to review applicable national regulations before deciding how to treat such components.

Company cars are a common example of a more complex pay component and should be assessed carefully. The following principles can help guide your approach:

In practice, different employee groups may use cars in different ways (e.g. company cars vs. work vehicles), so it can be helpful to capture additional context where needed. Regardless of the approach taken, it is important to apply it consistently and ensure it aligns with local regulations and company policy.

Use amounts, not percentages
For now, pay component uploads should use monetary amounts. If a component is defined internally as a percentage, convert it to an amount before upload.

Use blank values for non-eligibility
If an employee is not eligible for a given component, use a blank value rather than trying to model it differently.

At the end of this step, you should have:

The pay components workshop is used to identify all relevant elements of total compensation, decide what to prioritise for the first analysis, and map those elements into a practical PayGap structure that can later be linked to payroll codes, reporting categories, and deeper gap analysis.

Do we need to include every pay code in the first analysis?
No. Start with the components that are most material and least equally distributed. Smaller elements can be added later.

Should we use contractual or actual data?
It depends on the purpose. Reporting and right-to-pay-information are likely to require actuals, while remediation and pay review decisions are usually better supported by contractual data.

How should we treat company cars?
If a car can be used privately, it is generally harder to justify excluding it. If it is taxable, there is an even stronger case for including it consistently as part of compensation.

Should non-eligible employees have zero or blank values?
Use blank values when an employee is not eligible for a component.

Can we upload percentages?
Component values should be uploaded as amounts.