The gender pay gap: state of UK business in 2025

When you dive into employee payroll data, you’ll uncover more than just numbers. It gives you the chance to see how different groups are valued in today’s workplace. 

One of the most persistent and troubling trends in the UK is the gender pay gap, which continues to shape the business landscape in 2025.

Despite growing awareness, recent gender pay gap stats show that the problem hasn’t gone away. 

While the gender pay gap may be falling, last year it still stood at 7% in favour of men.

With that in mind, our team is here to break down what the gender pay gap really means, what the latest numbers are telling us, and crucially, how small businesses can lead the change in closing it. 

What is the gender pay gap in 2025?

The gender pay gap is the difference in average earnings between men and women. It highlights pay disparities across jobs, seniority levels and industries. 

In the UK, the gender pay gap remains a key measure of workplace equality.

The latest stats show that the gender pay gap is bigger in employees aged 40 years and over and is highest in skilled trade occupations.

Causes of the UK gender pay gap

Despite the Equal Pay Act 1970 outlawing unequal pay for men and women in identical roles, the gender pay gap still exists in 2025.

Let’s take a look at some of the key reasons why:

1. The motherhood penalty

One of the most persistent causes of the gender pay gap in the UK is the unequal division of childcare. 

Traditionally, women carry a greater share of childcare responsibilities and are far more likely to reduce their hours, take extended leave or adapt their work schedules to meet the needs of their children.

While maternity leave remains a legal employment right, with new mothers required to take at least two weeks off after birth, progress in paternity pay and shared parental leave has been slow, making it financially harder for many fathers to take on equal caring roles.

The career interruption from taking time off to have children has a lasting impact, too. A 2024 survey by the Fawcett Society found that over 60% of working mothers felt that having children limited their chances of promotion or career advancement. 

2. Women avoid male-dominated fields

Some of the UK’s highest-paying industries, like technology, engineering and construction, continue to be dominated by men, which is another contribution to the gender pay gap.

Despite growing awareness, women remain underrepresented in these skilled, high-salary sectors. According to the 2024 Women in Tech Survey, just 27% of UK tech roles are held by women, showing that progress is still slow.

This lack of representation creates a cycle. When girls and young women don’t see female role models in STEM (Science, Technology, Engineering and Maths), they are less likely to picture themselves pursuing careers in these fields. 

3. “Feminine” skills are undervalued

While male-dominated sectors like tech and engineering are often rewarded with higher salaries, many female-dominated professions, such as social care, HR and administrative roles, continue to be undervalued.

These so-called “feminine” industries often rely on emotional intelligence, communication and caregiving, abilities that are harder to quantify than technical skills like software development.

This can directly impact how women’s work is valued and paid. 

Both of the below jobs typically require a four year degree for example, but the pay difference is stark. 

The difference in pay between these roles highlights how traditional women’s roles are dismissed compared to those traditionally occupied by men.

Looking ahead, the challenge for traditional female roles could intensify. A recent UN report warns that women are three times more likely to have their roles taken over by AI compared to men.

Key statistics for 2025

So, how do the gender pay gap statistics look in 2025?

• The gender pay gap has fallen by 23% over the last decade.
• If progress continues at the same rate as recent years, it’s estimated that the gender pay gap will take 29 years to close.
• The gender pay gap is most apparent when employees reach 40 years of age.
• The most common profession where the gender pay gap is apparent is within barristers and judges (29%).
• Women outearn men in approximately 16% of jobs. These include roles in community and civil enforcement, welfare, biological science, and more.

Industry-specific developments/startups

One of the industries where the gender gap draws the most attention is within the technology and engineering sectors.

This is an industry that typically has rapid salary growth, but is a traditionally male-dominated field.

The good news is that STEM participation among young women is steadily improving. 

More female graduates are entering fields like software engineering, data science and biotechnology, and UK startups are increasingly offering graduate pathways aimed at women. 

Campaigns such as Tech She Can and Code First Girls also play a critical role in challenging old stereotypes and creating visible female role models in tech-led businesses.

However, while the talent pipeline is strengthening, this hasn’t yet translated to equal pay or leadership representation in startup ecosystems. 

Women remain significantly underrepresented in founder, CEO and senior technical positions, meaning the gender pay gap persists.

Emerging trends

In 2025, several key trends are impacting what the gender pay gap looks like in the UK.

The continued rise of hybrid and remote work policies has brought mixed results. While flexible working has helped some women remain in the workforce, it may unintentionally limit access to high-visibility projects and promotions, both of which can contribute to the gender pay gap.

Interestingly, Gen Z women are showing narrower pay gaps compared to older cohorts, reflecting a generational shift in salary expectations and negotiation confidence. (Go Gen Z!)

The cost of living crisis is another element impacting pay, with some women feeling the need to accept lower pay in order to secure a role and gain financial stability. 

All of this highlights the need for strict policies within the workplace in order to prevent pay progress from slowing down in the years ahead.

Gender pay gap reporting: requirements for employers

UK businesses with 250 or more employees must publish gender pay gap data every year by 6 April. 

This mandatory reporting includes male and female employee payroll information and has become standard practice among large and medium-sized organisations.

While small businesses are not legally required to report gender pay gap data, many choose to do so voluntarily. Publishing this information can help demonstrate transparency, track progress, and showcase a commitment to fair pay.

What to Include in a Gender Pay Gap Report

• Average gender pay gap for salaries and hourly wages
• Average gender pay gap for bonuses and commissions
• Gender split across pay quartiles (salary bands)
• Number of men and women promoted
• Number of men and women who received a pay rise in the last year

Most of this data can be easily gathered using payroll reporting tools within your existing payroll software.

How can employers address the gender pay gap?

Paying staff fairly isn’t just a legal duty, it’s essential for retaining talent, protecting your company’s reputation and driving growth. When women feel undervalued, businesses risk lower productivity, poor staff retention and missed recruitment opportunities.

On the flip side, eliminating gender bias and supporting fair pay can build stronger teams and help you attract the top talent.

Here are four practical ways to help close the gender pay gap within your business:

1. Embrace Flexible Working

Flexible policies like hybrid work can reduce the motherhood penalty, helping women balance work and childcare without sacrificing hours or promotions. Emerging trends like the four-day work week can especially benefit working women by protecting pay while reducing hours.

2. Invest in DEI Ambassadors

DEI isn’t a box-ticking exercise. Despite low prioritisation (only 5.1% of firms focused on it in 2024, according to a Startups survey), investing in a DEI ambassador helps ensure fair hiring, pay and promotion, especially for women from underrepresented backgrounds.

3. Offer Enhanced Parental Leave

Boosting maternity, paternity, and shared parental leave supports smoother returns to work and promotes shared caregiving. Clear communication around these policies can encourage uptake and help break the stigma around fathers taking extended parental leave.

4. Reassess Performance Reviews

Traditional reviews can overlook certain skills and contributions, especially those of female workers such as communication, admin and organisation. Ensure your performance reviews are bespoke to the employee and role, rather than comparing each employee and role to the same metrics.

Final thoughts

The gender pay gap remains a complex issue in the UK, but progress is possible. 

By embracing flexible working, supporting inclusive leadership and committing to transparent pay practices, small businesses and startups have a real opportunity to drive change. 

Closing the gap isn’t just a box-ticking exercise, it’s a chance to build stronger, fairer workplaces where everyone can thrive…and that can only be a positive for your business!