23 July 2026
Employers may need to review how they collect, store and report employee sex data following updates to the Government’s Gender Pay Gap (GPG) reporting guidance.
The change follows last year’s Supreme Court ruling that, for the purposes of the Equality Act 2010, ‘sex’ means biological sex. As GPG reporting derives from the Equality Act framework, the Government has updated its guidance to reflect that position.
Employers withing the scope of the duty to report must:
- use biological sex (assigned at birth) and not acquired gender
- include non-binary employees in the data, using biological sex.
Previously, employers could exclude non-binary employees from part of the analysis.
The guidance recognises that employers may not currently hold the data required for GPG reporting and states that organisations should take ‘reasonable and proportionate’ steps to obtain it. It recommends having a consistent process for collecting this information that applies to all employees, regardless of sex or gender identity. Employers are encouraged to consider information already held within payroll or HR systems before collecting new data.
However, where existing information is unavailable or unreliable, organisations should provide a proportionate and confidential way for employees to confirm or update their recorded sex. The guidance also recommends that employers should not request documentation to verify biological sex.
GPG reporting data is often extracted directly from payroll systems. However, this revised guidance may create challenges as for RTI purposes, payroll systems are required to record and report an employee’s current gender. This creates a potential disconnect between payroll reporting and GPG reporting requirements, raising questions about how organisations collect, maintain and report employee data.
The revised guidance also addresses reporting in relation to employees with a Gender Recognition Certificate (GRC) that employers should use biological sex for GPG reporting, even where an employee holds a GRC. However, it also emphasises that information relating to a person’s pre-GRC gender should remain strictly confidential, noting disclosure may be a criminal offence except in limited circumstances, therefore access should be limited to the GPG report before it is anonymised.
Whilst the updated guidance does not change the requirement to report GPG figures, it may change how some employers gather, store and govern the data behind those reports. For employers, the challenge is no longer simply calculating the figures, but ensuring that the right data is available. As organisations review their reporting processes, all teams must work together to determine whether existing systems, controls and data collection processes remain fit for purpose under this revised guidance.
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