Skip to the main content.
Talk to an expert
Talk to an expert
Featured Offer
Ambitious 50 →
6 months of Hire and Engage free for businesses under 50 people.

Hey Compono!

A coach that actually gets you.

Get 10 minutes free, then $15 a month. Cancel anytime.

Get Started ≫
Free tools for HR leaders

Wage underpayment
calculator (Australia)

Estimate your back-pay liability and the penalty exposure now that intentional underpayment is a criminal offence.

Your numbers

Estimated exposure
 
Share
Is wage underpayment a crime in Australia?

Intentional underpayment became a criminal offence on 1 January 2025 under the Closing Loopholes reforms. Honest, inadvertent mistakes are excluded from the criminal provisions.

How we calculated this

Back-pay is the number of potentially affected employees multiplied by the estimated average weekly underpayment, multiplied by the weeks affected. The headline exposure multiplies that back-pay by three, which is the multiplier the law now uses for the maximum penalty in the worst case: a company convicted of intentional underpayment faces the greater of three times the underpayment or a fixed maximum fine. That makes the exposure figure a ceiling for sizing the risk rather than a prediction, and it excludes interest, super and the cost of the remediation itself. The working, the assumptions and the sources are below.

New to the term? Read the plain-English definition of wage theft in the HR Glossary.

Your working
Assumptions
  • The three-times multiplier is the maximum for a criminal conviction or a serious civil contravention. It applies to intentional underpayment; honest mistakes are excluded from the criminal offence, and many underpayments are resolved with back-pay plus interest and no penalty at all. Your realistic exposure is likely well below the headline; the headline is what a board should know is possible.
  • One average weekly figure across everyone affected. Underpayments usually cluster (a misapplied classification, a missed penalty rate, an annualised salary that stopped covering the hours, super not paid on the right earnings), so a proper audit by employee will move the total in either direction.
  • Back-pay excludes interest and the superannuation owed on the shortfall (plus the super guarantee charge for paying it late). Both are owed on top.
  • The fixed maximum fine is indexed. The Fair Work Ombudsman currently publishes $9.1 million for a company and $1.82 million or 10 years' imprisonment for an individual, applying where the court cannot determine the underpayment or three times the amount is lower.
Sources

What to do about it

The number above is a ceiling. What decides where you land beneath it is how quickly you find the cause and how well you document the fix. These steps are for whoever runs payroll or people operations, whether or not they will be the one explaining it to the board.

1

Find the mechanism before you find the total

Underpayments have a cause: a wrong classification, a missed penalty or allowance, an annualised salary that no longer covers the hours, unpaid super. Pull a sample of payslips and timesheets for the roles most likely affected and check them line by line against the award. Until you know the mechanism, any total is a guess.

2

Quantify it per employee, with interest and super

Rebuild each affected person's pay for the period from records, add super on the shortfall and interest, and keep the workings. Then take the real figure, however uncomfortable, to whoever holds legal risk. A partial disclosure costs more than a complete one.

3

Fix the pay first, then talk to the regulator

Correct the rates going forward and pay what is owed, then tell people plainly what happened. Then consider the Fair Work Ombudsman's routes: cooperation agreements for employers who self-disclose, and the Small Business Wage Compliance Code for those with fewer than 15 employees. Get advice on the choice; this page is not it.

4

Repair the system that produced it and name an owner

Rosters, timekeeping, payroll rules and the award itself changed at different times and no system reconciled them. Assign one person to reconcile award rates, classifications, hours and allowances every 1 July and after every roster change, and log every classification decision with the reason. Honest mistakes with a paper trail are treated very differently from unexplained ones.

5
Where a tool helps

Read how it landed with the people who stayed

An underpayment finding tells your workforce something about how much attention was being paid. Some will accept the fix and move on; some will start looking. Find out which, team by team, in the months after, because the exit costs land on top of the back-pay.

Back-pay is one bill.
Trust is the other.

Compono Engage is an employee engagement platform that reads culture and climate alongside work personality, so you can see how a team is really working and how it is responding, while the people are still there to ask. Payroll and rostering tools own the numbers on this page. They have nothing to say about what the finding did to the people who were underpaid, or to the ones who watched.

Step 5 asks how it landed. Engage shows you, team by team, and it does something payroll cannot do beforehand: it shows where a team is stretched and disengaged, which is where hours drift past the roster and classification stops matching the work. The exposure above is what the process missed. Engage reads the people side of the same moment.

Talk to us
Compono Engage
8%+
reduction in turnover

Common questions

How large can the penalties be?

For companies, penalties can reach the greater of three times the amount underpaid or about $9.1 million (from 1 July 2026), alongside the back-pay owed to employees.

What is the safe harbour for small business?

The Voluntary Small Business Wage Compliance Code provides a safe harbour. A small business that complies with the code will not be referred for criminal prosecution for an underpayment.

Does this calculator give legal advice?

No. It estimates the financial scale of a potential exposure so you can decide whether to seek advice and act. For a specific situation, consult a workplace relations lawyer or the Fair Work Ombudsman.

This page is general information, not legal advice. We check figures annually and update them on a best-efforts basis, but employment rules change and we cannot promise everything here is current or complete. Before you act on it, confirm the detail with the Fair Work Ombudsman or your own adviser. Last reviewed July 2026.

Next step

Business case

Build the business case

Turn this number into a document your CFO can question line by line.

Open the builder →Related tool

Award wage increase calculator 2026

Keep the same numbers moving. The next calculator picks up where this one stops.

Run it next →HR Glossary

Wage theft

The plain-English definition, with the calculators and rules that sit around it.

Read the definition →Talk to us

Bring us your number

A 30-minute conversation about what it means for you, not a demo script.

Talk to us →