Why Conduct a Pay Equity Analysis?
According to the Discrimination Act, employers are required to conduct a pay equity analysis every year. This involves examining wage disparities between individuals with equal or equally valued job responsibilities. At which time during the year the equity analysis is performed doesn’t matter. The purpose of the pay equity analysis is to discover, remedy, and prevent gender differences in pay. The analysis must be presented to the Equality Ombudsman (Diskrimineringsombudsmannen) upon request.
Systematically working with the pay equity analysis is crucial for achieving gender equality in the workplace. With a clear understanding of the wage balance between female and male employees, employers can rectify any unjust wage differences and prevent them from occurring in the first place.
Stricter Pay Mapping Requirements Under the Pay Transparency Directive
The EU Pay Transparency Directive, which will become Swedish law in 2026, introduces stricter requirements for both pay transparency and reporting. As an employer, you’ll need to demonstrate that your pay structure is gender-neutral and disclose how salaries are distributed between women and men. If the analysis reveals significant differences, you’ll be required to conduct a thorough review and develop an action plan.
In addition, Swedish employers with 100 or more employees will be subject to regular reporting obligations to the authorities. In other words, a detailed and well-documented pay analysis will soon be more important than ever.
Additional Benefits for Your Organization
And that’s not all. Conducting a pay equity analysis can bring several added benefits to your organization, including:
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A stronger foundation for salary reviews and individual pay decisions
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Greater insight into your organization’s pay structure
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A more gender-equal workplace and a stronger employer brand
Some Good-to-know Key Concepts:
Equal work (or substantially similar work): Employees performing the same or very similar job tasks.
Equally valued work: Jobs that impose similar demands on employees performing them.
Unjustifiable pay differences: Pay differences must be justifiable based on factors such as job responsibilities, employee competence, or the difficulty of job tasks. If there is no factor explaining a pay difference, except for gender, it is considered an unjust pay difference.
Checklist – Here Are the Steps in a Pay Equity Analysis:
For an optimal process, you should follow a clearly defined structure. It pays off to be thorough, especially the first time, as it will give you a head start the next time.
Here’s a checklist for all the parts of the pay equity analysis:
- Assemble a workgroup
Conduct the pay equity analysis in collaboration between employers and employees (directly or through any relevant union). Form a workgroup and create a plan for the analysis process. - Compile pay regulations and practices
Gather all workplace agreements, routines, and criteria that determine employee pay and benefits. - Map and analyze pay differences in equal work
Group employees based on their job tasks. Map and analyze any pay differences between men and women performing equal work (the same or very similar job tasks). - Map and analyze differences in equally valued work
The next step is to investigate if there are any pay differences between female-dominated jobs and other equal jobs, also known as job evaluation (in Swedish arbetsvärdering).
The evaluation should be based on knowledge and skills, responsibility, effort, and working conditions. The evaluation should, therefore, be entirely based on the job requirements; employees' individual skills and accomplishments are not factors to be considered.
The job evaluation should involve a thorough mapping and analysis of:
• Female-dominated jobs (jobs performed by women to 60 percent or more)
• Equally valued work
• Female-dominated jobs where the requirements are deemed higher, but the salary is still lower.
These jobs are then compared with non-female-dominated jobs where the requirements are lower, but the salaries are higher. If there is no reasonable explanation for why the female-dominated job, despite having higher requirements, still has a lower salary level, you, as the employer, must address this.
Read more: Job Evaluation – How Does It Work? - Documentation/action plan
Employers with ten or more employees must also document their pay equity analysis. The documentation should include the results of the analysis and the actions and pay adjustments determined. You should also document how your collaboration occurred and report on the results from the actions planned in the previous year's analysis.
The Equality Ombudsman (DO) offers e-training (in Swedish) on the components of the pay equity analysis with general information on how to proceed.
Let Smart Tools Help You in the Process!
Does the annual pay equity analysis feel complicated and time-consuming? Don’t worry. We’ve simplified the process with a tool that automates key steps and saves you time — while ensuring full compliance with legal requirements.
With the pay analysis fully integrated into Flex HRM, you no longer have to juggle multiple systems. Instead, you can focus on what really matters — the analysis itself. The tool keeps track of everything for you: when it’s time for a new analysis, you can access all the information you need — employees, salaries, and accurate figures — with just a click.
Got questions? Reach out to us, and we'll be happy to provide more information!
