The gender pay gap measures the difference between the average earnings of women and men in the workforce. It is not the difference between two people being paid differently for work of the same or comparable value, which is unlawful. This is called equal pay.
The gender pay gap is an internationally established measure of women’s position in economy in comparison to men. It is the result of the social and economic factors that combine to reduce women’s earning capacity over their lifetime.
The gender pay gap is influenced by a number of factors, including:
- conscious and unconscious discrimination and bias in hiring and pay decisions
- women and men working in different industries and different jobs, with female-dominated industries and jobs attracting lower wages
- lack of workplace flexibility to accommodate caring and other responsibilities, especially in senior roles
- high rates of part-time work for women
- women’s greater time out of the workforce for caring responsibilities impacting career progression and opportunities.
- women’s disproportionate share of unpaid caring and domestic work
The gender pay gap can start when women first enter the workforce. A combination of factors affect women's lifetime economic security and makes it likely that over a lifetime women will earn less than men, be less likely to advance their careers as far as men, and accumulate less superannuation and savings than men, and will therefore be more likely to live in poverty in old age.
The gap between women’s and men’s earnings is a symptom of a broader cultural problem in workplaces. It reflects the historic and systemic undervaluing of women’s workplace contributions and the significant barriers that lead to the under-representation of women in senior executive and management roles.
Closing the gender pay gap goes beyond just ensuring equal pay. It requires cultural change to remove the barriers to the full and equal participation of women in the workforce, including the genuine equal choice to access the same career or work opportunities as men in all occupations, industries and levels of seniority.
Workplace Gender Equality Agency (WGEA) and Australian Bureau of Statistics (ABS) data both show a gender pay gap favouring full-time working men over full-time working women in every industry and occupational category in Australia.
If you are looking for resources on how to address gender pay equity within your organisation visit: Addressing pay equity
The WGEA collects pay data annually from non-public sector organisations with 100 or more employees, covering about 4 million employees in Australia, including superannuation, bonuses and other additional payments.
The full-time total remuneration* gender pay gap based on the 2017-18 WGEA data is 21.3%, meaning men working full-time earn $25,717 on average a year more than women working full-time. The full-time base salary gender pay gap for 2017-18 is 16.2%, which means that men working full-time earned $15,457 on average more than women.
Gender pay gaps are calculated across the WGEA dataset by industry, and by management and non-management occupational categories.
ABS and WGEA data both show a gender pay gap favouring full-time working men over full-time working women in every industry and occupational category in Australia.
The current WGEA gender pay gap data, drawn from the Agency’s 2017-18 reporting data, shows a total remuneration gender pay gap of 21.3%, meaning men working full-time earn on average nearly $25,717 a year more than women working full-time.
* Total remuneration includes full-time base salary plus any additional benefits – bonus payments, performance pay, superannuation, discretionary pay, overtime, other allowances and benefits, for example share allocations.
The National gender pay gap
The national gender pay gap is calculated by the Workplace Gender Equality Agency (WGEA) using data from the Australian Bureau of Statistics (ABS).
Currently, the national gender pay gap remains stable at 14.0%, a drop of just 0.1pp over the last six months. It had previously hovered between 15% and 19% for the past two decades.
The national gender pay gap is the difference between women’s and men’s average weekly full-time base salary earnings, expressed as a percentage of men’s earnings. It is a measure of women’s overall position in the paid workforce and does not compare like roles.
Equal Pay is when men and women receive equal pay for work of equal or comparable value. In practical terms, this means that:
- men and women performing the same work are paid the same amount
- men and women performing different work of equal or comparable value are paid the same amount.
Equal pay is not just about equal wages. Equal pay takes into account discretionary pay, allowances, performance payments, merit payments, bonus payments and superannuation.
Organisations that are committed to equal pay will ensure that:
- the wages and conditions of jobs are assessed in a non-discriminatory way. This is done by valuing skills, responsibilities and working conditions in each job or job type (even where the work itself is different) and then remunerating employees accordingly
- the workplace's organisational structures and processes do not impede female employees' access to work-based training, promotions or flexible working arrangements.
International gender pay gaps
Gender pay gaps are an internationally established measure of women’s position in the economy. Directly comparing international gender pay gaps is problematic due to differences in sources, definitions and methods used to calculate the gender pay gap in different countries. However, it is clear that gender pay gaps in favour of men are a common feature of economies world-wide.
The business case for gender equality
The gender pay gap is not just a problem for women – it affects everyone in society.
There is a strong correlation between a country’s progress in closing the gender gap and its economic competitiveness, national productivity, innovation, economic growth,and ability of companies to attract and retain talent.
Research has also shown that gender diversity at a leadership level could boost workplace performance while simultaneously acting to correct gendered pay inequities.
Women’s full access and participation in the workplace is also crucial to future-proof the Australian economy as technology changes workplaces and jobs evolve – requiring a diverse, highly skilled, trained and resilient workforce.
Read the full business case for gender equality here.