EU Pay Transparency Directive: how tax recruitment processes are changing

The EU Pay Transparency Directive is changing what candidates expect before they enter a recruitment process.

Much of the discussion focuses on equal pay, gender pay gap reporting and compliance, but its impact on recruitment is just as important.

For employers hiring tax professionals, the Directive increases the need to define a role properly before taking it to market.

Here’s how tax recruitment processes are changing due to the EU Pay Transparency Directive.

What is the Directive?

Directive (EU) 2023/970 is intended to strengthen equal pay for equal work and work of equal value.

It also aims to address pay discrimination and help reduce the gender pay gap.

EU Member States were required to incorporate the Directive into national law by the 7 June 2026 transposition deadline, except for the Netherlands whose deadline is January 2027.

The specific requirements differ between countries, but employers should expect greater focus on transparent pay structures and clearer information for job applicants.

This article is the first in our series on what the Directive means for tax recruitment.

Rather than examining the legal requirements, here’s what employers need to agree internally before a vacancy goes live:

• The role’s scope
• Its level and seniority
• The salary range and total remuneration package
• Who needs to approve the role
• How the opportunity will be communicated to candidates

Tax hiring leaves little room for uncertainty

Tax recruitment is specialised, commercially sensitive and candidate led.

A tax vacancy may require a professional with a precise combination of technical expertise, sector experience and international exposure. For example, an employer may be seeking:

• A corporate tax specialist with cross-border experience
• A transfer pricing professional
• An indirect tax or VAT expert
• A tax technology or transformation leader
• A senior tax professional able to lead a regional or global function

Each requirement narrows an already limited pool of potential candidates.

The strongest professionals are also unlikely to be actively applying for roles. They are often employed, well rewarded and selective about which opportunities they explore.

Before committing to an interview process, candidates will typically want to understand:

• Why the role has been created
• What they will be responsible for
• Who they will report to
• How the role fits within the wider tax and finance team
• Whether it offers meaningful career progression
• The likely salary range and wider benefits package

Compensation is not an administrative point for the end of the process. It is part of a candidate’s early decision about whether an opportunity is worth pursuing.

For senior tax hires, total remuneration may include:

• Base salary
• Annual bonuses
• Pension contributions
• Benefits
• Long-term incentives
• Equity-related incentives, where relevant

“We are open depending on experience” may appear flexible. In a specialist market, it can instead suggest that the organisation has not agreed what it needs or what it is prepared to pay.

The challenge is often internal

Recruitment problems frequently begin before a vacancy is advertised.

The issue is not always the availability of talent. It is often a lack of internal clarity around the role itself.

A hiring manager may know that their team is under pressure or needs stronger tax capability. But turning that requirement into a consistent, market-ready brief requires decisions that can be delayed.

Common problems include:

• Responsibilities are still being defined during interviews
• Stakeholders disagree about whether the role should be manager, senior manager, director or head of tax level
• The salary range has not been approved
• HR, reward teams and hiring managers are giving different messages about the role
• The reporting line or team structure is still unclear
• The organisation has no agreed job architecture for comparing the role with internal positions
• Progression opportunities have not been considered

This becomes visible to candidates quickly.

For example, a hiring manager may describe a strategic business-partnering opportunity, while another stakeholder presents the position as largely compliance-focused. A leadership title paired with a relatively junior pay range can create the same problem.

When messages do not align, candidates can question the opportunity and the employer’s decision-making.

Why transparency changes the conversation

Historically, some employers have started recruitment with broad parameters. They test the market, review available talent and refine the role or compensation package later.

That approach is increasingly difficult to sustain.

Candidates will expect clearer information earlier, particularly around salary range, role level and progression. Recruiters also need the information to establish whether the opportunity is relevant and financially viable for the people they approach.

Employers can still retain flexibility for exceptional candidates, but flexibility should be based on a defined framework, rather than uncertainty over the budget or job level.

Salary ranges and pay bands help create that framework. They give HR, hiring managers and recruiters a shared reference point for discussing:

• The role’s level
• Base salary and total remuneration
• Benefits and bonuses
• Available flexibility
• Pay progression
• The rationale for an eventual offer

In practice, recruitment processes are likely to involve:

• Earlier conversations about starting salary and salary expectations
• More detailed job descriptions
• Clearer job adverts and job postings
• Internal approval of the salary range before going to market
• Consistent messaging from recruitment, HR and hiring stakeholders
• Recruitment practices that do not rely on salary history or pay history

This can make recruitment more efficient. Candidates outside the relevant pay range can opt out early, while those who continue have a clearer understanding of the opportunity.

Align HR and hiring managers

A successful recruitment process relies on alignment between the people who own different elements of the hiring decision.

Recruiters are often placed between HR and hiring managers. They need enough technical detail to identify relevant tax professionals, as well as a clear reward position to discuss the opportunity confidently.

Without alignment, recruiters are left managing uncertainty externally. This can result in:

• Mixed messages to candidates
• Slower recruitment processes
• Late-stage candidate withdrawals
• Salary negotiations that become difficult to manage
• Offers that do not meet market expectations
• A weaker employer brand

Before launching a search, employers should ensure that hiring managers, HR and reward stakeholders agree:

• The purpose and scope of the role
• Its level within the job architecture
• The salary range and remuneration package
• Essential skills and experience
• The reporting line
• The interview and decision-making process

This isn’t an additional administrative hurdle, but the basis of an efficient, credible search.

Three questions before hiring

Before taking a tax role to market, every employer should be able to answer three questions.

1. What is the scope? Be clear about the problem the hire will solve

2. What is the level? Define seniority through practical accountability, not just job title

3. What is the range? Agree the salary range and total reward position before recruitment begins

Better information, better hiring

The EU Pay Transparency Directive is an opportunity to strengthen recruitment foundations.

Transparency isn’t the problem. The real risk is taking an under-defined role to market and expecting candidates, recruiters or late-stage salary negotiations to resolve the gaps.

Better recruitment starts with three things:

• A clear scope
• An agreed level
• A credible salary range

With those foundations in place, employers can engage specialist tax talent with confidence, run a more efficient recruitment process and make stronger long-term hiring decisions.

Get in touch with us today to discuss your tax hiring needs.