Fewer than half of UK employees believe their employers are open and honest about pay, according to new research, even as Britain ranks ahead of European neighbours on transparency around compensation and reward.

The findings are based on responses from over 16,000 employees and 5,625 HR managers across sixteen European countries,* shows that while the UK is outpacing much of Europe on pay transparency, significant gaps in communication and trust remain.

The research* found that just 46.6 percent of UK employees said their employer is sufficiently transparent about pay, including policies on rewards, pay gaps and salary increases. The figure is higher than the European average of 30.3 percent, where only around one in three workers feel their company is open about pay.

From June 2026, the EU Pay Transparency Directive will require companies in the European Union to disclose wage structures and criteria for salary decisions both internally and externally. While the UK is not part of the directive following Brexit, growing demands for openness from employees and regulators continue to shape employer practices.

Gender pay gap remains a challenge

The survey shows that, despite progress, pay inequality persists, with more than four in 10 UK employers (41.3 percent) acknowledging the existence of a gender pay gap, a figure that is among the highest in Europe. This openness is mirrored in other northern European countries, including Norway and Sweden, but less so elsewhere.

Almost half of UK employees (47.4 percent) said their organisation is actively working to close the gender pay gap, compared to just under four in 10 across Europe. The UK also ranked highest among surveyed countries for broader efforts to tackle inequality, with 41 percent of workers recognising steps being taken to “level the playing field”.

Yet only 48.3 percent of UK employees feel their pay is competitive for their sector, slightly ahead of the European average. There remains a widespread sense that pay does not always match expectations or market rates, with 42.8 percent of UK respondents saying they deserve to earn more.

What’s driving UK progress?

Experts say Britain’s relatively strong performance on pay transparency is the result of long-standing equal pay legislation, greater employee engagement and the ready availability of pay information through job adverts and online platforms such as LinkedIn and Glassdoor.

“The research shows that our market is leading the way, perhaps due to our history of equal pay legislation, employee engagement and candidates and employees being able to access information on salary banding from job ads, forum reviews and LinkedIn. However, of course, there’s still work to be done,” Laura Miller, UK people country lead at SD Worx, said.

Transparency in compensation is closely linked to higher employee morale, improved retention and a stronger employer brand, all of which are vital in a competitive recruitment market. The ability for candidates to compare pay easily means employers risk losing talent if they do not communicate openly and address inequalities.

Advice for employers

With both regulatory and employee scrutiny increasing, experts recommend several steps for organisations looking to improve trust and meet rising expectations around pay:

Communicate clearly: Employers should ensure pay policies, bonus structures and progression criteria are accessible and understandable for all staff. This can include regular updates and open forums for questions about pay.

Conduct pay equity audits: Reviewing the entire wage policy for inconsistencies or gaps helps identify where action is needed. Independent audits can provide objective analysis and highlight areas for improvement.

Publish total reward statements: Sharing clear information about the full value of pay and benefits, including pensions, bonuses and perks, helps employees appreciate their overall package and reduces misunderstanding.

Address gender pay gaps: Set clear targets and publish annual progress. Encourage transparency about starting salaries and promotion pathways to avoid unconscious bias.

Prepare for new regulations: Even though the UK is outside the EU Pay Transparency Directive, many British firms operate internationally or compete for talent globally. Adopting best practice on transparency now can future-proof organisations and strengthen recruitment.

“Transparency about the full remuneration package, including benefits, is important in the perception of a ‘fair’ wage. A total reward statement can help with this. Companies would also do well to have their entire wage policy reviewed as the deadline for the directive approaches in Europe and scrutiny continues in the UK,” Miller advised.

*Research from SD Worx