Short answer: the gender pay gap is the difference between men's and women's average hourly pay across a whole organisation, shown as a percentage of men's pay. UK employers with 250 or more staff must publish it every year [2]. In April 2026 the UK gap for full-time employees was 6.8% [5]. AQA 7138 links pay gaps to EDIB and ethics in HR [1].
What the 7138 specification asks
Topic 3.2.1 covers how businesses manage people, including employee wellbeing. Its section on ethics in HR (human resources) is A-level only and examined on Paper 2. It lists a code of conduct; equality, diversity, inclusion and belonging (EDIB); and pay gaps, both gender and between senior managers and other employees [1].
EDIB and pay gaps are new to 7138. Neither appears in the old 7132 course. We explain all the changes in AQA A-Level Business is changing.
EDIB in plain English
- Equality: treating people fairly and not discriminating against them. In the UK, the Equality Act 2010 protects nine characteristics: age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation [6].
- Diversity: having a workforce with a mix of backgrounds, experiences and characteristics.
- Inclusion: making sure those different people can take part, be heard and progress.
- Belonging: staff feel accepted and valued at work. This links to Maslow's love and belonging needs.
So a firm can be diverse without being inclusive. If only one group gets promoted, others may leave. This is why EDIB sits close to employee wellbeing: staff who feel excluded are less likely to feel well at work.
How gender pay gap reporting works in the UK
Any employer with 250 or more employees on its snapshot date must report. The snapshot date is 5 April for private and voluntary sector employers, and 31 March for most public bodies. Figures must be published within a year of that date [2]. Each employer reports six measures [3]:
- The share of men and women in each hourly pay quarter
- The mean gender pay gap in hourly pay
- The median gender pay gap in hourly pay
- The share of men and women who receive bonus pay
- The mean gender pay gap in bonus pay
- The median gender pay gap in bonus pay
The median is the middle person's pay when everyone is lined up from lowest to highest. A few very high earners pull the mean up, so the median shows a typical worker better.
Action plans to close the gap are voluntary for now. GOV.UK says they will become mandatory from spring 2027, "subject to legislation" [4].
The gender pay gap is not the same as equal pay
Equal pay is the legal duty to pay men and women the same for the same work, or work of equal value. A gender pay gap can exist even when every job is paid fairly, because men may hold more of the higher-paid roles. ONS, the UK's national statistics office, makes the same point: its figure is a measure across all jobs, "not of the difference in pay" for the same job [5].
Invented data for practice. A small firm has five men and five women. Hourly pay for men: £11, £12, £14, £18, £25. Hourly pay for women: £11, £11.50, £12, £13, £20.
The median for men is £14. The median for women is £12. GOV.UK's method takes the difference and divides it by men's median pay [3]. So (£14 − £12) ÷ £14 × 100 = 14.3%. Women's median hourly pay is 14.3% lower than men's.
The latest UK figures
ONS published its 2026 figures, from the Annual Survey of Hours and Earnings (ASHE), on 22 October 2026. They are provisional [5].
| UK gender pay gap (median hourly pay) | April 2025 | April 2026 |
|---|---|---|
| Full-time employees | 7.2% | 6.8% |
| All employees | 13.0% | 12.3% |
| Part-time employees | −3.0% | −2.1% |
The gap is larger for all employees than for either group on its own. ONS explains why: more part-time employees are women, and part-time staff have lower median hourly pay [5]. The gap is also larger for staff aged 40 and over. For managers, directors and senior officials it was 11.4% in April 2026 [5].
UK example: Tesco
Tesco UK Retail, which includes Tesco Stores Limited and One Stop, covers 257,588 colleagues. At its 5 April 2025 snapshot, its median gender pay gap was 4.7%, down from 5.1% in 2024 [7].
Tesco gives two reasons. Its core hourly rate for store colleagues rose 13% over two years, and more women work in these roles. It also cut its Sunday premium from 17% to 10%, and more men work those shifts [7]. But women were 62.5% of the lowest-paid quarter and only 35.8% of the highest-paid quarter [7]. So much of the gap comes from who holds the higher-paid jobs.
Pay gaps between senior managers and other employees
For financial years starting on or after 1 January 2019, quoted companies with more than 250 UK employees must publish a CEO pay ratio [8][9]. A quoted company is one whose shares trade on a main stock exchange. This compares the chief executive's total pay with the pay of UK employees at the 25th percentile, the median and the 75th percentile [8].
The High Pay Centre, an independent think tank on economic inequality, is a secondary source. It found median FTSE 100 CEO pay of £5.06 million in 2025/26, up 8.6% on the year. That was 130 times the median full-time UK worker's pay [10].
Invented data for practice. A CEO's total pay is £2,400,000. The firm's median UK employee earns £30,000. So £2,400,000 ÷ £30,000 = 80. The median pay ratio is 80:1.
Why it matters for a business
Strong EDIB and a small pay gap can attract applicants and keep staff for longer. Because pay gap data is public, a large gap can damage a firm's reputation. A very high CEO pay ratio can lower morale if staff feel rewards are unfair. This links to Herzberg, who treated pay as a hygiene factor: unfair pay causes dissatisfaction.
But a high ratio may not mean pay is unfair. A retailer with many low-paid store staff is likely to have a higher ratio than a bank. So compare ratios within an industry, and over time.
Practice question, in our own words: A UK supermarket has a median gender pay gap of 15%. Assess whether raising hourly pay for store staff is the most effective way to reduce the gap.
Analysis: If most store staff are women, a higher hourly rate lifts women's median pay, so the gap narrows. Tesco reported this effect after a 13% rise in its core rate [7].
Counter-argument: However, the gap also comes from too few women in senior roles. A pay rise does not change who is promoted, and it raises costs.
Judgement: A pay rise works quickly where most low-paid staff are women. To close the gap for good, the firm also needs fair promotion and flexible senior roles. So it depends on where the gap comes from.
Notice the structure: linked steps joined by "so" or "because", real evidence, and a judgement that names what it depends on.
Practise the new 7138 topics
Our free Business starter pack covers people, marketing, finance and operations with real UK businesses and practice questions.
Get the free packFor quizzes on pay gaps and the rest of Paper 2, see the CC Business platform, Year 12 track. Most tutors teach the subject. We teach the criterion.
Sources
- AQA (2025). AS and A-level Business 7137/7138 specification, version 1.0, October 2025.
- GOV.UK (2026). Gender pay gap reporting: guidance for employers. Who needs to report, updated 21 May 2026.
- GOV.UK (2026). Gender pay gap reporting: guidance for employers. Making your calculations, updated 21 May 2026.
- GOV.UK (2026). Gender pay gap reporting: guidance for employers. Overview, updated 21 May 2026.
- Office for National Statistics (2026). Gender pay gap in the UK: 2026, 22 October 2026.
- Equality Act 2010, section 4: the protected characteristics (legislation.gov.uk). Equality Act 2010, section 4: the protected characteristics (legislation.gov.uk).
- Tesco PLC. Everyone's Welcome: pay gap report 2025 (snapshot date 5 April 2025).
- The Companies (Miscellaneous Reporting) Regulations 2018, regulation 17: pay ratio reporting (legislation.gov.uk). The Companies (Miscellaneous Reporting) Regulations 2018, regulation 17: pay ratio reporting (legislation.gov.uk).
- Department for Business, Energy and Industrial Strategy (2018). Corporate governance reforms: company reporting FAQs.
- High Pay Centre (2026). Analysis of UK CEO pay in 2025/26, July 2026 (secondary source).