The Gender Pay Gap: How It Is Calculated and How to Read the Numbers
According to the Federal Statistical Office (Destatis), Germany's gender pay gap fell from 18 percent in 2023 to 16 percent in 2024. That was the sharpest drop since the calculations began in 2006. The figure makes headlines but says little as long as it is unclear how it comes about. Why does the same statistics release also contain a value of 6 percent? This article explains how the two measures differ and how to read them.
What Is the Pay Gap and How Is It Calculated?
The unadjusted gender pay gap is the difference between women's and men's average gross hourly earnings. The result is given as a percentage of men's average earnings. It is a simple measure that compares two groups as a whole, without taking into account the characteristics of the people in those groups.
The calculation can be followed step by step. First, the average gross hourly earnings are worked out for women and for men. Then women's earnings are subtracted from men's, and the difference is divided by men's earnings. Converted to a percentage, this gives the value that appears in the statistics. If it stands at 16 percent, women's average hourly earnings are 16 percent below men's.
Internationally, this indicator is called the gender pay gap. Always check whether hourly earnings or monthly salaries are meant, because the result depends on it. Destatis uses gross hourly earnings.
The Adjusted Gender Pay Gap: What Does the Adjustment Change?
The adjusted gender pay gap compares people in similar positions and with similar qualifications. According to Destatis, it stood unchanged at 6 percent in 2024. If the unadjusted value falls, the adjusted one does not have to change, because the two measures capture different aspects.
Where does the distance between 16 and 6 percent come from? Among other things, it comes from differences in employment structure, meaning how people are spread across industries and occupations, the amount of working time and breaks in employment. If women and men are distributed differently across industries or occupations, the averages of the two groups refer to jobs of differing makeup. The same goes for working hours and for interruptions in a career, where the two groups may also differ.
The adjustment takes these factors into account. That is why the figure is lower. The remaining difference refers to people with similar characteristics.
How Do You Read the Pay Gap Data?
The adjusted value does not explain everything. Part of the differences may rest on factors that are not in the data. It should therefore be read neither as proof of inequality nor as its refutation. Six percent means that, after the available characteristics are accounted for, a difference remains that those characteristics do not explain. What exactly lies behind it is not known. That is an important limit of this measure.
The unadjusted value, by contrast, shows the size of the general earnings difference but says nothing about its causes. It is a starting point, not a finished explanation. Only looking at both numbers gives a fuller picture, because it shows which part of the difference is linked to the employment structure.
The regional picture matters too. In 2024, the unadjusted value was 5 percent in the new federal states and 17 percent in the old ones. The nationwide average therefore hides large differences. Keep that in mind before comparing results from different regions or years.
Which Measure Belongs in the Debate?
Both measures answer different questions. The unadjusted value shows the general earnings difference, and the adjusted one the difference between people with similar characteristics. In conversations about the pay gap, you should therefore always say which measure you mean and name the year and the source. That makes it clear why the figures of 16 and 6 percent do not contradict each other.
The safest approach is to follow one simple rule: name the measure, give the year and cite Destatis as the source. The rule can be applied whenever the data is used.