Pay quartiles are one of your six statutory gender pay gap figures — and on the surface they look simple. Sort your employees by pay, split them into four groups, report the male/female percentage in each. But there’s a step that the government guidance buries in a single paragraph that catches employers out every year. Get it wrong and your quartile figures are non-compliant. This guide walks you through the correct method from start to finish.
What Are Pay Quartiles?
Pay quartiles show the gender split at different levels of your organisation’s pay distribution. You divide all your full-pay relevant employees into four equally-sized groups — from lowest to highest paid — and report what percentage of each group is male and female.
The four quartiles are:
- Lower hourly pay quarter — your lowest-paid employees
- Lower middle hourly pay quarter
- Upper middle hourly pay quarter
- Upper hourly pay quarter — your highest-paid employees
Quartiles tell a story that mean and median figures alone can’t. An organisation might have a relatively small overall pay gap but a heavily male-dominated upper quartile — which suggests a pipeline or progression problem rather than a pay discrimination one. They give context to your other figures, which is why they matter.
Important: Quartiles use full-pay relevant employees only — not all relevant employees. Anyone on reduced pay due to leave (maternity, sick leave, annual leave and so on) is excluded from this calculation.
The Four Steps
The regulations set out a specific four-step process. You must follow this method — the guidance is explicit that you should not create your pay groups in any other way.
Step 1: Sort employees from highest to lowest hourly pay
Take your list of full-pay relevant employees and their calculated hourly pay figures. Sort the entire list from the highest hourly rate at the top to the lowest at the bottom. This sorted list is the foundation for everything that follows.
Step 2: Divide the list into four equal quarters
Divide the sorted list into four sections with an equal number of employees in each. This sounds simple — but what if your headcount isn’t divisible by four?
The regulations handle this precisely. If you have employees left over after dividing by four:
- 1 employee left over: add them to the lower quarter
- 2 employees left over: add one to the lower quarter and one to the upper middle quarter
- 3 employees left over: distribute one each to the lower, lower middle, and upper middle quarters
Following the guidance’s distribution rules, remainders are always added to the lower, lower middle, or upper middle quarters — never the upper quarter.
Step 3: Check the gender distribution where employees share the same hourly pay
This is the step that trips employers up. More on this below.
Step 4: Calculate the percentage of men and women in each quarter
For each quartile, divide the number of men by the total employees in that quartile and multiply by 100. Repeat for women. Your percentages should add up to 100% within each quartile.
Example: Calculating quartile percentages
An employer has 1,112 employees in the lower hourly pay quarter. 187 are men and 925 are women.
Men: 187 ÷ 1,112 × 100 = 16.8%
Women: 925 ÷ 1,112 × 100 = 83.2%
The Mistake That Catches Employers Out: Employees With the Same Hourly Pay
Here’s the scenario. You’ve sorted your employees from highest to lowest pay and drawn a dividing line between two quartiles. Right on that line, you have a group of employees who all earn exactly the same hourly rate. Some fall into one quartile, some fall into the next.
If you simply leave them where they land — split arbitrarily by where the line happened to fall — you could end up with a skewed gender distribution that doesn’t reflect your actual workforce. The regulations require you to correct for this.
The rule is: distribute men and women across the affected quartiles as fairly as possible, in proportion to the gender split of that pay-rate group as a whole.
Example: Distributing employees with the same hourly pay
An employer has 4,445 full-pay relevant employees. After sorting and dividing into quartiles, they find 40 employees all share the same hourly pay rate — 36 women and 4 men. The dividing line between the lower and lower middle quartiles falls within this group:
- 10 of these employees have fallen into the lower quarter
- 30 have fallen into the lower middle quarter
The gender split across all 40 is 90% women (36) and 10% men (4).
The employer must apply this same ratio to each affected quartile:
- Lower quarter (10 employees): 9 women and 1 man
- Lower middle quarter (30 employees): 27 women and 3 men
Simply leaving the employees where the line fell — say, 10 women and 0 men in the lower quarter — would misrepresent the gender distribution.
In practice, this situation arises most often at the boundaries between quartiles in organisations with large numbers of employees on the same pay grade or band. It’s particularly common in the public sector, retail, and hospitality — anywhere with standardised pay scales.
Common Mistakes to Avoid
Using all relevant employees instead of full-pay relevant employees
Quartiles are calculated using full-pay relevant employees only. Anyone on reduced pay due to leave must be excluded. Including them distorts the pay distribution because their recorded pay for the period is artificially low.
Not applying the remainder rule correctly
When your headcount isn’t divisible by four, the extra employees must be distributed according to the specific regulatory rule. You can’t simply round each quartile to the nearest whole number or add the remainders to whichever quartile is most convenient.
Skipping the equal-pay check at quartile boundaries
Many employers simply split the sorted list into four and stop there, without checking whether the dividing lines fall within a group of employees on identical pay. This is the most commonly overlooked step — and the one most likely to make your figures non-compliant.
Using pay band or grade instead of actual hourly pay
The sort must be by individual calculated hourly pay — not by pay grade, pay band, or job level. Two employees in the same grade may have different hourly rates due to length of service, part-time hours, or allowances. The regulations require you to use the actual hourly figure for each individual.
Reporting headcounts instead of percentages
Your statutory obligation is to report the percentage of men and women in each quartile — not the raw headcounts. Reporting numbers rather than percentages is a common formatting error when submitting to the government portal.
A Note on Rounding
You can report your quartile percentages as whole numbers or rounded to one decimal place. Either is compliant. Within each quartile, male and female percentages should sum to 100% — if your rounding produces 99.9% or 100.1%, that’s acceptable, but it’s worth flagging in your narrative if it creates confusion.
Why Quartiles Matter Beyond Compliance
Your quartile breakdown is often the most revealing of all six statutory figures — and the one most scrutinised by employees, journalists, and analysts. A 10% mean pay gap looks very different depending on whether your upper quartile is 60% male or 90% male. Quartiles show whether your pay gap is driven by the distribution of men and women across pay levels, which typically points to recruitment, progression, and retention issues that a pay audit alone won’t fix.
Getting them right isn’t just about compliance. It’s about having figures you can stand behind and build a credible narrative around.
Make This Easier With the Right Tools
Sorting employees, applying the remainder rule, checking quartile boundaries for equal-pay ties, and then calculating four sets of percentages — all while making sure you’re only including full-pay relevant employees — adds up to a lot of careful manual work in a spreadsheet built from scratch.
📋 Free Download: Data Preparation Checklist
Make sure your employee data is ready before you start calculating — including which employees to include and how to handle edge cases.
Download Free →If you want to skip the manual work entirely, the Gender Pay Gap Report Toolkit handles all six statutory calculations in one place — including the quartile logic, remainder distribution, and equal-pay boundary checks.
⚡ Gender Pay Gap Report Toolkit
Pre-built Excel calculator covering all 6 statutory figures. Enter your payroll data once — the tool handles the rest.
Get the Toolkit →Frequently Asked Questions
Do I include part-time employees in the quartile calculation?
Yes — as long as they are full-pay relevant employees. Part-time status doesn’t exclude anyone from the quartile calculation. What matters is whether they were paid their usual full pay in the pay period, not how many hours they work. A part-time employee on their normal pay is included; a full-time employee on reduced pay due to sick leave is excluded.
What if two employees have exactly the same hourly pay and fall on a quartile boundary — but one is male and one is female?
Apply the proportional distribution rule. Distribute men and women across the affected quartiles so that the ratio of men to women in each is as close as possible to the ratio across the whole group sharing that pay rate. The goal is to ensure the gender ratio within that pay-rate group is reflected proportionally in each quartile.
Can I use salary instead of hourly pay to rank employees?
No. The regulations require you to use calculated hourly pay — the same figure you derive in Step 5 of the data preparation process. Using annual salary or monthly pay would disadvantage part-time employees, who would appear lower in the ranking than their actual hourly rate warrants.
What if my organisation has exactly 400 employees — does the remainder rule still apply?
No — if your headcount divides evenly by four (400 ÷ 4 = 100), each quartile has exactly 100 employees and no remainder distribution is needed. The remainder rule only applies when the total is not divisible by four.
Should the percentages in each quartile add up to exactly 100%?
Yes, in principle. In practice, rounding to one decimal place may produce totals of 99.9% or 100.1%. This is generally accepted. You can report as whole percentages to avoid the issue entirely, as both formats are permitted under the regulations.