Introduction: Pay transparency is no longer optional — it’s the future

Across Europe and the U.S., pay transparency has moved from a progressive ideal to a legal and business necessity.

Driven by new EU legislation and growing pressure for fairness, companies are being asked to show how they pay and why.

For employers who manage recruitment in-house, this shift brings both risk and opportunity. Those who act early can turn compliance into a competitive advantage — improving trust, employer branding, and efficiency in hiring. Those who wait risk confusion, legal exposure, and lost candidates.

What Is the EU Pay Transparency Directive?

In May 2023, the European Union adopted Directive (EU) 2023/970, also known as the Pay Transparency Directive.
Member states must integrate the directive into national law by June 7, 2026.

Here’s what the new rules will require:

• Employers must provide a salary range in job ads or before interviews.

• Pay secrecy clauses will be banned.

• Job applicants will have the right to know average pay for comparable roles.

• Companies will have to analyze and report gender pay gaps.

• Any pay gap of 5% or more that cannot be justified must be jointly reviewed with employee representatives.

• Companies must disclose the criteria for setting pay and promotions clearly.

For Swedish, EU-based, or international employers, that means building systems to collect, analyze, and report salary data transparently.

Why pay transparency is good business — not just compliance

While it may feel like another compliance task, pay transparency actually benefits organizations in several ways:

• 💡 Trust and employer branding: Transparency signals honesty and integrity — qualities top talent values.

• ⚙️ Efficient hiring: Clear salary ranges reduce irrelevant applications and speed up decision-making.

• ⚖️ Fairness and equality: Structured pay data reduces unconscious bias and improves gender equity.

• 🚀 Competitive advantage: Early adopters are seen as progressive, modern employers.

• 🧭 Risk reduction: Detect and fix pay gaps before they become legal liabilities.

In short, pay transparency builds trust inside and outside your organization.

How the directive impacts European employers

Sweden and many EU countries already have some pay equity laws — but the new directive goes much further.

By 2026, companies must be able to prove - not just claim - that their pay structure is fair and transparent.
Those who prepare in 2025 will avoid costly last-minute adjustments.

How an ATS like kabox.io helps you stay compliant

Manual compliance management is difficult, especially as regulations evolve. That’s where technology and automation can make all the difference.

An Applicant Tracking System (ATS) such as kabox.io can help companies integrate transparency directly into their recruitment and HR processes.

1. Salary range in job posts

• Ensure every job listing includes a salary range before it goes live.

• Customize default pay ranges by role, department, or region.

• Receive alerts if a listing is missing required pay information.

2. Integrated career site and job platform distribution

• Publish transparent job ads directly on your branded career page.

• Share roles across multiple job platforms with one click.

• Create a consistent and modern candidate experience.

3. Education and internal alignment

• Use kabox.io to help HR with pay transparency guidelines.

• Help managers communicate confidently and consistently about pay.

In short - an ATS like kabox.io turns compliance into clarity.

Step-by-step: How to prepare for pay transparency

• Audit your current pay structure

  Review all salaries, roles, and levels. Identify data gaps.

  
  

• Analyze pay differences

  Flag any gaps that cannot be justified by experience, role, or performance.

  
  

• Create salary bands

  Define clear pay ranges per role, seniority, and geography.

  
  

• Implement your ATS

  Use kabox.io to enforce pay range rules before publishing jobs.

  
  

• Educate your team

  Train HR, hiring managers, and executives on pay equity principles.

  
  

• Review and improve annually

  Build pay transparency into your ongoing business strategy.

  
  

Conclusion: Be proactive, not reactive

Pay transparency is not just a compliance issue - it’s part of the future of modern employment.
By preparing early and adopting smart recruitment technology, your company can turn regulation into opportunity.

With kabox.io, you get an ATS that helps you stay compliant, build fairness into your process, and strengthen your employer brand - all in one platform.