Salary Transparency Rules – What do I need to know?

You’ve probably seen in the news that the days of advertising a job with only the words ‘competitive salary’  could be numbered.

The UK Government has launched a major consultation on equal pay, and one of the proposals is likely to affect every business when they recruit new staff.

To encourage salary transparency, there is a strong chance that employers will be required to include pay information in all job adverts, and even to provide this information in writing before interviews.

Although the full details have yet to be finalised, and the consultation will continue through to the end of October 2026, these new salary transparency rules are very likely to be approved and implemented at some point next year.

So what could it mean for your business the next time you hire someone?

What are the proposed salary transparency rules?

The Government wants employers to be more transparent about pay at the start of the recruitment process.

Its proposal is that all employers should publish salary information when advertising a job.

If there isn’t a formal job advert, for example if you’ve found somebody through a recommendation, approached them directly or you’re recruiting more informally, you’d still have to provide the pay information in writing before interviewing them.

Exactly what you’d have to disclose has not been decided yet.

The consultation is asking whether employers should have to provide:

• • • • • • a specific salary

          • a salary range, or

          • a benchmark rate.

It’s also considering whether other information should be included, such as annual pay adjustments or other financial benefits.

This detail matters. There’s obviously quite a difference between putting “£28,000–£32,000 depending on experience” on a job advert and having to provide much more detailed information about pay and benefits, so this is one of the things the consultation is trying to establish.

Would SME-size businesses be included?

Yes.

The Government is proposing that this requirement applies to all employers. There isn’t currently a small-business exemption or minimum number of employees.

This means that a small business recruiting its first or second employee could potentially have the same basic obligation to disclose pay as a much larger employer.

The Government does say it wants the eventual requirements to create as little additional burden as possible, and that it wants to avoid introducing new reporting requirements alongside this proposal.

But if it goes ahead, small employers who currently decide salary fairly informally may need to introduce a little more structure.

Why is the Government doing this?

The main aim is to reduce pay discrimination.

The thinking is that if employers have to decide what a job is worth before they start interviewing people, there’s less opportunity for two candidates to end up being offered very different salaries for essentially the same job.

It also gives candidates information that employers already have. Currently, if a business knows it has £30,000 available for a role but doesn’t tell applicants, candidates are effectively negotiating in the dark.

However, there are potential advantages for employers. For example, if your maximum budget is £35,000 and a candidate won’t consider anything below £45,000, discovering that before you’ve spent several hours interviewing each other is probably a good thing.

For small businesses in particular, where recruitment can take the owner or manager away from actually running the business, that could save a considerable amount of wasted time.

Is this the end of “competitive salary”?

Potentially.

If some form of these proposals becomes law, simply putting “competitive”, “negotiable” or “depending on experience” in the salary box is unlikely to be enough on its own.

But we don’t yet know whether businesses will have to publish an exact salary or whether a sensible salary range will be acceptable.

The Government is specifically asking employers and other interested parties for their views on this.

It’s also possible that rules could be introduced around salary ranges themselves. The consultation proposes giving the Government powers to specify detailed requirements later, potentially including the size of an acceptable salary range.

It could change more than your job adverts.

This is where things get particularly interesting for small employers.

Salary transparency isn’t just about adding another line to a job advert. It potentially forces you to answer a question before you start recruiting: what is this job actually worth?

For many small businesses, pay evolves fairly organically.

You recruit somebody at £28,000. They get a couple of pay rises. Another employee negotiates harder when they join. Somebody else gets an increase because you don’t want them to leave.

A few years later, you’ve got several people doing similar jobs on noticeably different salaries.

There may be perfectly legitimate reasons for those differences: experience, responsibilities, performance or market conditions, for example.

But sometimes there isn’t a particularly clear reason beyond “that’s what we agreed at the time,” and having to publish salaries could make those inconsistencies much more visible.

Imagine you’re advertising a role at £32,000–£36,000, and an existing employee doing substantially similar work is earning £28,000. They’re quite likely to notice and, understandably, want to know why they’re being paid less.

That doesn’t automatically mean you’ve done anything unlawful, but it could create an awkward and potentially damaging situation if you don’t have a good answer.

Developing properly thought-through salary bands, with clear and objective reasons for where people sit within them, will become increasingly important,  helping you justify what you’re offering new recruits while avoiding pay decisions that are difficult to explain to your existing team.

What should small businesses do now?

At this stage, there’s no requirement to change anything. The consultation is still open and the final rules have not been established.

But there are a few sensible habits worth adopting anyway.

Decide your salary before you recruit.
Work out what the role is worth and what you can genuinely afford rather than waiting to see what candidates ask for.

Use realistic salary ranges.
If you’re advertising £30,000–£40,000 but realistically have no intention of paying more than £32,000, that’s not particularly helpful to anyone.

Check what existing employees are earning.
Before advertising a new role, compare it with similar positions already in your business.

Be able to explain differences.
Different employees can legitimately earn different amounts. What’s important is having clear, objective reasons for those decisions rather than arbitrary ones.

Keep a record of salary decisions.
Small businesses don’t necessarily need complicated salary structures or huge HR systems. A simple record explaining how you arrived at a salary can be extremely useful later.

Flat Fee Recruiter can provide full support, including salary benchmarking and interview advice, when you advertise your vacancies with us.

Salary transparency is only one part of a much larger consultation.

The Government is also looking at changes to how equal-pay disputes are handled and enforced.

Among the proposals is a new Equal Pay Regulatory and Enforcement Unit, which would take a more proactive role in tackling pay discrimination.

The Government is also considering stronger requirements around equal-pay audits where an employer has been found to have breached equal-pay law, alongside the possible return of a formal questionnaire process that employees could use to obtain information relating to suspected pay discrimination.

There are also longer-term proposals concerning equal-pay protections for ethnic minority and disabled workers.

So this isn’t simply a proposal about what you put in a job advert. It’s part of a wider attempt to make pay decisions more transparent and pay discrimination easier to identify and challenge.

When will the new rules start?

We don’t know yet, and there’s certainly no immediate deadline for businesses to comply with these particular proposals.

The consultation was published in July 2026 and has subsequently been updated, and the Government is asking employers, employees, HR professionals, trade unions and other interested groups for their views.

Importantly, the Government has also said it intends to allow an extended implementation period before any measures come into force, giving employers time to prepare.

And because this is a consultation, some of the proposals could change significantly before becoming law.

Our take for small businesses.

If salary transparency does become compulsory, it shouldn’t be something small businesses need to fear.

In many cases, being upfront about salary already makes recruitment easier: candidates know whether the role meets their expectations, employers waste less time interviewing people they can’t afford, and everyone starts the conversation knowing roughly where they stand.

However, businesses will need to think a little more carefully about how they decide what jobs are worth, how salaries compare across their existing team and whether they can explain any significant differences.

That’s good practice regardless of whether these particular proposals ultimately become law, but for now, there’s no need to overhaul your recruitment process.

That said, if you’re planning to recruit over the coming months, it’s certainly worth getting into the habit of answering one question before your job advert goes live:

“What are we actually prepared to pay this person?”

Because before too long, you may have to tell them.

Flat Fee Recruiter is committed to helping businesses fill their vacancies quickly, cost-effectively, and without resorting to expensive agencies.

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