Pay factors are the variables PayGap uses to explain differences in pay between employees. They represent legitimate, work-related elements that influence pay decisions, such as performance or competencies. The factors you select determine how much of the raw pay gap is explained by objective drivers and how much remains as the adjusted (unexplained) pay gap.
The configuration of pay factors should reflect the elements your organization considers when setting pay. The final selection is defined by the company administrator and can be reviewed and adjusted at any time.
Important The setup described below applies globally to all legal entities by default and can only be modified by organization admins. If you have legal entity admin access only, the global pay factors section will appear read-only - the controls will be inactive and you will not be able to change anything in it. You can still configure pay factors specifically for the legal entities you have access to via the Override pay factors for a specific legal entity section at the end of this article. |
When to use this article
You are setting up pay factors for the first time.
You want to test how different combinations of factors affect the adjusted pay gap.
You are reviewing which factors are currently used in the Adjusted Pay Gap breakdown.
Step-by-step guide
1. Open Organization Settings
Click on your organization name to open Organization Settings.
2. Go to the Analysis tab and locate Pay factors
In the Analysis tab, the Pay factors section is shown directly below the Comparable Job setup.
3. Add pay factors
Click + Add and select the factors you want to include. The dropdown lists:
• All fields you uploaded with your employee data (e.g. Job Level, Job Title, Location, Business Unit, Division, Department, Job Code).
• Two factors generated automatically by PayGap:
Factor | How it is calculated |
Tenure | Number of months between the employee's hire date and the analysis date. |
Age | The employee's age at the analysis date. |
Important considerations for Tenure and Age
Tenure - The regression treats tenure as a continuous, linear predictor: each additional month of tenure is assumed to have the same incremental effect on pay (a fixed amount in a linear model, a fixed percentage in a log-linear model). In practice, pay growth with tenure is rarely uniform - most of the increase happens in the first few years (onboarding, learning curve, early promotions) and then flattens out as employees reach the typical pay level for their role. Forcing a straight-line relationship through this curve makes the model either underestimate early-career growth, overestimate late-career growth, or settle on a compromise that fits neither well. The result is that tenure explains less of the pay gap than it should and the remaining adjusted gap is distorted.
To avoid this, consider uploading a custom field with capped tenure (for example, tenure capped at 36 or 60 months) and using that field as the pay factor instead. A capped tenure treats all employees beyond the cap as having the same seniority for modelling purposes. This restricts the regression to fit only the early-career growth phase, where the linear assumption is much closer to reality, producing a more reliable model and a more accurate decomposition of the pay gap.
Age - Age is often used as a proxy for experience, but we generally do not recommend including it as a pay factor. Pay differences attributed to age can be perceived as age-based discrimination and are difficult to justify under pay transparency obligations. If you want to capture experience in the model, use job-related variables such as time in grade, years of relevant experience, or time since last promotion instead. These reflect actual job-related experience rather than chronological age.
You can add as many factors as needed. The platform lets you test different combinations and review the impact on the adjusted pay gap before settling on a final setup.
4. Remove pay factors
To remove a factor, click the × next to its name. Removing a factor takes it out of the model and the explained portion of the pay gap will be recalculated accordingly.
5. Save your changes
Scroll to the bottom of the page and click Save.
6. Decide whether to keep resolved cases
When you save, PayGap will ask you to confirm the update. Changing pay factors recalculates pay predictions and reruns case management. Case history stays intact, but case statuses may reset.
Option | Effect |
Keep resolved cases checked | Preserves resolved cases and their evidence. Case statuses are not changed. |
Keep resolved cases unchecked | Case statuses are reset so they reflect the current employee situation under the new model. |
Recommendation: If you have not yet started working on case documentation, leave the option unchecked so that case statuses fully reflect the new analysis. If case management work is already underway, keep it checked to avoid losing justifications already in place.
7. Wait for the recalculation
After confirming, PayGap recalculates the adjusted pay gap. This usually takes a few seconds and at most a few minutes, depending on the size of your dataset.
8. Verify the new setup in the Adjusted Pay Gap breakdown
Open Analysis → Adjusted Pay Gap. The breakdown chart shows how your pay factors explain the pay gap across the entire legal entity population.
Each bar between the unadjusted and the adjusted pay gap represents one of the pay factors currently used in the model and shows its overall contribution to the explained portion. If the factors shown match your latest selection, the recalculation is complete and the new setup is now active.
9. Override pay factors for a specific legal entity
By default, the pay factors you save apply globally to all legal entities. If a specific legal entity needs a different setup, you can override the global configuration without affecting other entities.
Scroll to the Legal entities analysis settings section at the bottom of the Analysis page and follow these steps:
Select the legal entity from the search field at the top of the section.
Toggle the Pay factors switch on the right. The tag next to the switch changes from Global settings to Overrides, indicating that this section now uses entity-specific values.
Add or remove pay factors for this legal entity as needed, using the same controls as in the global setup.
Save your changes. The save confirmation and recalculation behave the same way as for the global setup.
Any field left unset continues to use the global organization settings. To revert an override, switch the toggle back off.
Who can change this:
Organization admins can override pay factors for any legal entity.
Legal entity admins can override pay factors only for the legal entities they have access to.
Key information
Pay factors should reflect legitimate, work-related drivers of pay.
Available factors include all uploaded employee fields plus Tenure and Age, which PayGap calculates automatically.
Use Tenure with care (consider a capped custom field for a better regression) and avoid Age as a pay factor, since it can be perceived as age-based discrimination.
The setup applies globally by default and can be overridden per legal entity in Organization Settings → Analysis → Legal entities analysis settings.
Organization admins can override pay factors for any legal entity; legal entity admins only for entities they have access to.
Saving recalculates the adjusted pay gap and reruns case management. The Keep resolved cases option controls whether existing case statuses are preserved or reset.
Common questions and troubleshooting
What is the difference between a comparable job and a pay factor?
Comparable jobs define how employees are grouped for the gender pay gap analysis. Pay factors define which variables are used to model and explain pay differences within and across those groups in the adjusted analysis.
Should I add as many factors as possible?
No. Adding too many factors can over-explain the gap and lead to a poorly fitted model. Include only factors that genuinely reflect legitimate pay drivers in your organization.
Should I include Tenure and Age as pay factors?
PayGap calculates both automatically - Tenure from the hire date and Age from the date of birth. For Tenure, we recommend uploading a capped tenure as a custom field (e.g. capped at 36 or 60 months) and using that instead of raw tenure, because pay growth is rarely linear over time. For Age, we generally do not recommend including it, as pay differences attributed to age can be perceived as age-based discrimination. Use job-related variables such as time in grade or years of relevant experience instead.
Can I configure different pay factors for a specific legal entity?
Yes. Scroll to the Legal entities analysis settings section at the bottom of the Analysis page, select the legal entity, toggle the Pay factors switch to Overrides, and configure the factors for that entity. Any field left unset continues to use the global organization settings.
Who can change pay factors?
Organization admins can configure pay factors globally and override them for any legal entity. Legal entity admins can only override pay factors for the legal entities they have access to.
Can I change pay factors after case management work has started?
Yes, but it changes the basis of the analysis. Use the Keep resolved cases option to decide whether existing case statuses should be preserved or reset.
How long does the recalculation take? Usually a few seconds, and at most a few minutes for larger datasets.