The pay gap vs equal pay: what's the difference?
Every spring, a wave of headlines announces that some large employer has a gender pay gap of twenty-something per cent, and a wave of comments underneath asks how that can possibly be legal. It is legal, and understanding why is the single most useful thing you can know about pay in the UK.
Pay gap vs equal pay is not a matter of wording. They are two different things with two different legal statuses. Equal pay is a right you can enforce in an employment tribunal. The gender pay gap is a statistic employers are required to publish. A company can have a wide gap and be paying everyone lawfully. A company can have no gap at all and still be breaking equal pay law. This piece sets out the difference, grounded in the Equality Act 2010 and ACAS guidance, with a worked example so the arithmetic is not doing anything mysterious.
Equal pay is a legal right
Equal pay means men and women must receive the same pay and contractual terms for doing equal work for the same employer, or an associated employer. It has been the law since the Equal Pay Act 1970 and now sits in the Equality Act 2010.
The mechanism is a sex equality clause. Under section 66 of the Equality Act 2010, if your contract does not contain one, the law treats it as though it does. Where a term of your contract is less favourable than the equivalent term for a comparator of the opposite sex doing equal work, that term is automatically modified so it is no longer less favourable. You do not have to negotiate it. The clause is read into your contract by statute.
“Equal work” is wider than most people assume. Section 65 and ACAS guidance on equal pay law set out three routes:
- Like work. The jobs are the same or broadly similar, and any differences are not of practical importance.
- Work rated as equivalent. A job evaluation scheme has rated the two jobs as equivalent on skill, responsibility, and effort.
- Work of equal value. The jobs look nothing alike but are of equal value when you weigh skill, training, responsibility, and the demands of the working conditions.
That third route is the powerful one. ACAS gives the example that a clerical job and a warehouse job can count as equal work. It is why supermarket shop floor workers have been able to compare themselves with warehouse operatives.
Equal pay law covers more than salary. ACAS lists basic pay and wages, pension, working hours, annual leave, holiday pay, overtime pay, redundancy pay, sick pay, contractual bonuses, and benefits such as a company car. It applies to employees, workers, apprentices, agency workers, and people on full-time, part-time, or temporary contracts.
An employer can defend a difference. Under section 69, the sex equality clause has no effect if the employer shows the difference is because of a genuine material factor that is not itself sex discrimination, such as location weighting, a shortage skill, or a shift pattern. The reason has to be real and it has to have nothing to do with sex.
The gender pay gap is a reporting measure
The gender pay gap is a completely different animal. It is the difference between the average hourly pay of all the men in an organisation and all the women in it, whatever jobs they happen to do. It compares populations, not people.
The duty comes from section 78 of the Equality Act 2010 and the Gender Pay Gap Information Regulations 2017. Any employer in England, Scotland, or Wales with 250 or more employees on its snapshot date must publish six figures within a year: the mean and median hourly pay gaps, the mean and median bonus gaps, the proportion of men and of women receiving a bonus, and the proportion of men and of women in each of four pay quartiles. The snapshot date is 31 March for most public authorities and 5 April for everybody else, and the figures sit publicly on gender-pay-gap.service.gov.uk.
Two things follow from the design. Employers report for each separate legal entity, so one household-name brand can publish several very different numbers. And government guidance requires partners in traditional partnerships and LLP members to be excluded, because they take a share of profits rather than a salary, which removes the top of the pay structure at every law firm and consultancy.
Separately, the Office for National Statistics publishes a national figure from the Annual Survey of Hours and Earnings. For April 2025 it was 6.9% for full-time employees and 12.8% across all employees, both medians. The ONS is explicit that this measures all jobs in the UK, not pay for doing the same job. Our guide on how the gender pay gap is calculated works through the mechanics.
A worked example where nobody is underpaid and the gap is 50%
Picture a consultancy with 20 employees and two grades.
Ten senior consultants are paid £60 an hour. Eight are men, two are women. Ten junior consultants are paid £30 an hour. Three are men, seven are women. Everybody at the same grade is paid exactly the same, so there is no equal pay problem anywhere in the building.
Now run the reporting calculation. The 11 men earn a median of £60 an hour. The nine women earn a median of £30 an hour. The median gender pay gap is 50%. The mean works out at £51.82 for men and £36.67 for women, a mean gap of 29.2%.
Nothing unlawful has happened. The firm is simply top-heavy with men, and the measure is doing exactly what it was designed to do. Promote three of the junior women and the gap moves. Give every woman a pay rise within her grade and it barely moves at all.
The reverse case matters just as much. A four-person design agency, two men and two women on identical work, pays everyone £40 an hour except one woman on £34 because she negotiated less at offer stage. Its median gap is zero and its mean gap is tiny. It has an equal pay breach and no pay gap, and with fewer than 250 staff it never reports a figure at all.
Pay gap vs equal pay: why confusing the two costs women money
Confuse them and you draw the wrong conclusion in both directions. You assume a wide-gap employer is breaking the law when it may not be. You assume a narrow-gap employer is paying you fairly when it may not be. And in a job interview, you ask the wrong question.
The live UK litigation shows how much turns on the distinction. In August 2024 an employment tribunal in Leeds found that more than 3,500 Next store staff, predominantly women, were doing work of equal value to warehouse operatives, predominantly men, and were entitled to the same basic rate and several premiums. On 7 September 2026 the Employment Appeal Tribunal allowed Next’s appeal on basic pay, holding that the original tribunal had erred in finding the employer did not pursue a legitimate aim, while upholding findings on night premiums, overtime premiums, and paid rest breaks. The claimants’ solicitors have said they intend to appeal. Similar claims against Asda and Tesco are still running, with an Asda tribunal ruling in March 2026 that women in further store roles do work of equal value to depot comparators.
None of these cases is about the gender pay gap. Every one is about equal pay. The supermarkets involved report modest published gaps, which is precisely the point: the reporting measure was never designed to catch this. Our sector guide on whether UK retail is good for women sets the cases against the retailers’ own published figures.
What is changing in 2026 and 2027
Both halves of the system are moving.
On reporting, employers with 250 or more employees can now publish a voluntary action plan alongside their figures, setting out what they are doing to reduce their gender pay gap and to support employees experiencing menopause. Under the Employment Rights Act 2025 and the government’s guidance for employers, plans are voluntary from April 2026 and, subject to legislation, become mandatory from spring 2027.
On equal pay itself, the Office for Equality and Opportunity has opened a consultation on equal pay and pay discrimination closing at 5pm on 27 October 2026. It proposes an equal pay regulatory and enforcement unit, measures to stop outsourcing being used to avoid equal pay obligations, extending protections to ethnicity and disability, and publishing pay information in job adverts. The government’s own framing is that the current system is too slow, too expensive, and puts too much pressure on workers. Our explainer on pay transparency in the UK covers where this is heading.
What to do if you think you are not being paid equally
Start by working out what you are actually comparing. Write down your own pay and how it is made up, then identify a real comparator of the opposite sex doing equal work for your employer or an associated one. A comparator can be a current colleague or someone who used to hold the role.
You are allowed to have the conversation. Under section 77 of the Equality Act 2010, a contract term that tries to stop you disclosing or asking about pay is unenforceable when the purpose is to work out whether there is pay discrimination. Any clause telling you your salary is confidential does not override that.
ACAS suggests raising it informally with your employer first, then using a written question and answer process, then a formal grievance if that does not resolve it. If you end up at an employment tribunal the time limits are tight, because section 129 sets a qualifying period of six months beginning with the last day of your employment in a standard case. Get advice early rather than late. If the real issue is that you were offered less at the start rather than paid unequally for the same grade, our guide on how to negotiate a salary is the better place to begin. Either way, knowing the difference between pay gap vs equal pay is what tells you which conversation you are actually having.
Frequently asked questions
Is the gender pay gap illegal?
No. Publishing a gender pay gap is a legal requirement for employers with 250 or more staff, but having one is not unlawful. It usually reflects more men in senior, higher-paid roles. Unequal pay for equal work is the thing that is unlawful, and it is a separate issue governed by the Equality Act 2010.
Can a company have no gender pay gap and still breach equal pay law?
Yes. A small employer paying one woman less than a male colleague for identical work is breaching equal pay even if its overall averages come out level. It may also be below the 250-employee threshold and never publish a figure at all.
Who counts as a comparator in an equal pay claim?
Someone of the opposite sex who does equal work for the same employer or an associated employer, meaning one controls the other or both are controlled by the same organisation. They can be a current or a former colleague, and you can use more than one. Equal work covers like work, work rated as equivalent, and work of equal value.
How long do I have to bring an equal pay claim in the UK?
In a standard case the qualifying period under section 129 of the Equality Act 2010 is six months beginning with the last day of your employment. Different rules apply to concealment, incapacity, and stable work cases. Because the calculation is not always obvious, take advice from ACAS or a solicitor as soon as you suspect a problem.
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This is educational information, not legal advice. Equal pay is a complex area and the outcome depends on your contract, role, and circumstances. For free and impartial guidance, contact ACAS, read the Equality and Human Rights Commission statutory code of practice on equal pay, or speak to a solicitor.
Last reviewed: September 2026