Australia’s gender pay gap, driven in part by the undervaluation of the care economy, is having an impact on business performance and talent retention.
Today marks national Equal Pay Day, a date that represents the 50 additional days into the financial year that women must work to earn the same as men. New reports from key national agencies, including the Workplace Gender Equality Agency (WGEA) and Jobs and Skills Australia (JSA), have provided a detailed account of the current state of gender pay inequality.
The national gender pay gap, as calculated by WGEA using Australian Bureau of Statistics (ABS) data for full-time adult employees, is 11.5%. This figure indicates that, on average, women earn 88 cents for every dollar men earn, a difference of $242.30 per week. WGEA also reported that 84.7% of Australian employers still have a gender pay gap outside the optimal range of +/-5%.
The gender pay gap is a complex issue driven by systemic factors. While “equal pay for equal work” has been legally mandated for decades, the broader gap reflects stark economic differences between women and men, driven by occupational segregation, differences in working patterns, and historical biases that undervalue women’s work.
The business impact of the gender pay gap
Beyond its ethical and social implications, new research reveals the direct impact the gender pay gap has on business performance, affecting hiring, motivation, and retention. A recent “Pay Gap Matters” pulse check by AI-powered startup Evenbetter AI found a clear connection between pay equity and workforce decisions.
The survey found that one in three women in Australia would leave their job as a result of a significant gender pay gap. This sentiment also extends to job seekers, with more than two-thirds of prospective female hires (71%) reconsidering applying to a company with a high pay gap. This isn’t solely a women’s issue, as nearly one in three men (29%) said they would also reconsider an employer based on their pay gap. The impact extends to employee motivation and engagement, with 41% of women and 20% of men reporting that a pay gap reduces their drive at work.
Ayal Steiner, the co-founder of Evenbetter AI, says leaders who treat pay equity as a growth opportunity can “unlock stronger engagement, attract better talent and improve retention”.
The findings also reveal a snowball effect: companies with larger pay gaps tend to attract more male candidates, which further widens disparities and erodes diversity over time. The pressure on businesses is also increasing with the rise of pay transparency.
Occupational segregation and the undervalued care economy
A primary factor contributing to the pay gap is occupational and industry segregation. A recent study by JSA found that men are paid more than women in 98% of the 688 occupations analysed. The report notes that over the past 15 years, gender segregation has remained largely unchanged, with nearly 70% of professions retaining the same level of segregation. Only one in five Australian workers is in a “gender-balanced” occupation.
The JSA report highlighted that the most segregated occupations are often where pay gaps are at their worst. This points to the systemic undervaluation of work traditionally associated with women, particularly in the vast and essential “care economy.” Industries like early childhood education, aged care, and disability support are overwhelmingly staffed by women and are consistently among the lowest-paid. The systemic undervaluation of this work is a core driver of the national gender pay gap.
The study also introduced a new metric, an accumulated 10-year gender pay gap, which stands at 30.7%. For First Nations women, this accumulated gap is even wider at 38.1%, reflecting compounding barriers of both gender and race.
The gender pay gap varies across industries. The Financy Women’s Index, released in May 2025, highlighted a strong contrast between sectors. The overall timeline to close the gap is estimated to be 21.5 years. Industries like Financial and Insurance Services recorded a gap of 21.0%. In the private sector overall, the average total remuneration gender pay gap is 21.8%.
By contrast, the Commonwealth public sector has a significantly smaller average total remuneration gender pay gap of 6.4%, which is attributed to a more structured and transparent pay system. This data provides an important benchmark for what a more equitable pay structure can look like.
The motherhood penalty and unpaid work
Another major contributor to the gender pay gap is the impact of unpaid work, particularly childcare and domestic duties. According to the ABS, women spend significantly more time on unpaid work than men. The Financy Women’s Index points to this unequal division of labour as a major factor slowing progress, estimating that equality in unpaid work is still 42.4 years away.
This unequal division of labour often results in women reducing their paid work hours or stepping out of the workforce, which can have a long-term negative impact on their earnings and career progression – a phenomenon referred to as the “motherhood penalty.”
Conversely, men who become fathers often experience a “fatherhood bonus,” with their earnings increasing as they are perceived as more stable and committed. This disparity is further entrenched by a lack of sufficient paid parental leave for men and a societal reluctance for them to take it up. The heavy reliance on women for unpaid care work not only limits their career potential but also has a significant financial impact, including on their superannuation and retirement savings, creating a lifetime of economic disadvantage.
A focus on solutions and future outlook
Under the Workplace Gender Equality Act 2012, Australian employers with 100 or more employees are required to report their gender equality data to WGEA. This mandatory reporting, including individual employer pay gaps, aims to increase transparency and encourage accountability. Sorrel Kesby, co-founder of Evenbetter AI, noted that the survey results demonstrate that “pay equity is a key driver of growth and a strategic priority for business leaders.”
Policymakers and advocates have emphasised the need for continued focus on pay transparency, promoting flexible work arrangements, and addressing the undervaluation of female-dominated industries. Further legislative changes, such as the Workplace Gender Equality (Gender Equality Targets) Instrument 2025, now require employers with 500 or more employees to select and commit to achieving specific gender equality targets.
The data presented on Equal Pay Day 2025 confirms that while some incremental progress has been made, the gender pay gap remains a widespread and systemic issue. The increasing transparency and new legislative requirements provide a foundation for a more concerted effort. The path forward requires businesses to move from passive compliance to active leadership, governments to implement bold and equitable policies, and individuals to challenge ingrained gender biases.
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