Think You're Being Underpaid? How to Check & Claim Back Wages in Australia
A step-by-step guide to checking if you are being underpaid at work in Australia, how to use Fair Work's PACT tool, the formal complaint process, time limits for back-pay claims, and the new wage theft criminal penalties from 2025.
Signs you might be underpaid
Underpayment is far more common than most workers realise — the Fair Work Ombudsman recovers hundreds of millions of dollars in unpaid wages each year, and that represents only a fraction of actual underpayments. Common signs include: your pay does not change when you work weekends, public holidays, or evenings (you should be receiving penalty rates under most awards); you are classified as a casual but work regular, predictable hours without casual loading; your payslip does not itemise your base rate, penalties, allowances, and super separately; you are asked to work through unpaid breaks or before and after your rostered shift; you are paid a flat salary that supposedly covers 'all hours' without any analysis of whether it actually compensates you above the award rate for all hours worked; or your employer pays you cash-in-hand with no payslip. Junior employees, workers from non-English speaking backgrounds, international students, and visa holders are statistically the most likely to be underpaid, often because they are less likely to know their rights or fear consequences of speaking up.
Check your award or enterprise agreement
The first step is identifying which modern award or enterprise agreement covers your employment. There are 121 modern awards in Australia, each setting minimum pay rates, penalty rates, allowances, and conditions for a specific industry or occupation. Use the Fair Work Ombudsman's 'Find My Award' tool at fairwork.gov.au — enter your job title, industry, and duties, and it will identify your likely award. Once you know your award, check the current pay rates using the FWO's Pay and Conditions Tool (PACT). Compare the minimum hourly rate for your classification level against what you are actually being paid. Do not forget to check penalty rates (weekends, evenings, public holidays), overtime rates, allowances (travel, meal, uniform, tools), and casual loading (25% on top of the base rate). If you are covered by an enterprise agreement, this overrides the award but must pass the Better Off Overall Test (BOOT), meaning you cannot be worse off overall compared to the award. Your employer must provide a copy of any applicable enterprise agreement upon request.
Using the Fair Work PACT tool to calculate what you should be paid
The Pay and Conditions Tool (PACT) at calculate.fairwork.gov.au is the most reliable way to check your correct pay rate. Select your award, enter your employment type (full-time, part-time, or casual), your classification level, and the hours you work including any weekend, evening, or public holiday shifts. PACT will calculate your minimum entitlements including base rates, penalty rates, overtime, and allowances. Compare this output against your actual payslips over the past several pay periods. Pay particular attention to whether penalty rates have been correctly applied — this is the most common area of underpayment. For salaried employees, the key question is whether your annual salary, when divided by all hours actually worked (including any unpaid overtime), results in an hourly rate that meets or exceeds what PACT shows you should receive for those hours, including penalties. If the answer is no, you may be underpaid even though your salary looks reasonable at face value. Document your findings carefully — take screenshots of the PACT results and gather your payslips, rosters, and time records.
How to raise underpayment with your employer
Many underpayments are genuine errors — payroll systems misconfigured, wrong classification levels applied, or penalty rates not updated after annual wage review increases. Before escalating, give your employer a chance to fix it. Request a meeting with your manager or payroll department and present your findings calmly and factually: 'I have been checking my pay against the PACT tool, and I believe my [penalty rates/classification/allowances] may not be correct. Here is what I have found.' Bring printed copies of the PACT results and the relevant payslips. Most employers who are acting in good faith will investigate and back-pay any shortfall. Ask for the underpayment to be corrected in your next pay run and for a written confirmation of the adjustment. If your employer dismisses your concerns, becomes hostile, or retaliates in any way (reducing shifts, changing your role, terminating you), this is a serious matter — adverse action for exercising a workplace right is unlawful under the Fair Work Act, and the penalties are severe. Document all conversations in writing, even if they happen verbally — follow up with an email summarising what was discussed.
Formal complaint process through Fair Work
If your employer refuses to address the underpayment, you can lodge a formal complaint with the Fair Work Ombudsman online at fairwork.gov.au/submit-a-complaint. The FWO can investigate, issue compliance notices requiring your employer to rectify the underpayment, and in serious cases, pursue litigation in the Federal Court or Federal Circuit Court. The investigation process typically begins with the FWO contacting your employer to request payroll records. Your identity is kept confidential unless court proceedings are commenced. You can also pursue the matter independently through the small claims process in the Federal Circuit Court for amounts up to $100,000 — this is designed to be accessible without a lawyer, with simplified procedures and no requirement to pay the other side's costs if you lose. For larger claims, or if you are a member of a union, your union can assist with pursuing the claim through the courts. Legal aid and community legal centres can also provide free advice and representation for workplace underpayment matters.
Time limits: You can claim up to 6 years of back pay
The statute of limitations for underpayment claims in Australia is six years from the date the payment should have been made. This means if you discover today that you have been underpaid for the past four years, you can claim back pay for the entire four-year period. However, the practical challenge is evidence — your employer is only legally required to keep time and wages records for seven years, and your own payslips and rosters may be incomplete for older periods. The sooner you act, the better your evidence will be. For Fair Work Ombudsman investigations, there is no formal time limit for lodging a complaint, but the FWO may decline to investigate older matters if evidence is insufficient. For court proceedings, the six-year limitation period applies strictly — if you wait too long, you lose the right to recover those earlier amounts. Interest can also be claimed on underpaid amounts, calculated at the rate set by the relevant court. If your employer has gone into administration or liquidation, unpaid wages and entitlements may be recoverable through the Fair Entitlements Guarantee (FEG) scheme administered by the federal government.
Wage theft criminalisation: What changed in 2025
From 1 January 2025, intentional wage theft became a criminal offence under the Fair Work Act following passage of the Closing Loopholes legislation. Employers who deliberately underpay workers can now face criminal prosecution, with penalties of up to 10 years imprisonment for individuals and fines of up to three times the underpayment amount or $7.825 million (whichever is greater) for corporations. This represents a fundamental shift — previously, underpayment was treated as a civil matter with financial penalties only, meaning some employers treated fines as a cost of doing business. The criminal provisions apply to intentional conduct, meaning the employer knew they were underpaying or were recklessly indifferent to whether they were paying correctly. Genuine mistakes and accidents are not captured. The Fair Work Ombudsman works with the Commonwealth Director of Public Prosecutions to assess which cases warrant criminal prosecution versus civil enforcement. The new laws also introduced a Voluntary Small Business Wage Compliance Code — small businesses that self-report underpayments and cooperate with rectification may be eligible for reduced penalties. This creates a strong incentive for employers to audit their own payroll compliance proactively.
Try these free tools
Official resources
General information and estimates only — not legal, financial, or tax advice. Always verify with the Fair Work Ombudsman (13 13 94) or a qualified professional.
Related articles
You can claim underpayment going back 6 years in Australia. Learn about limitation periods, evidence requirements, small claims, class actions, and the new wage theft criminal offence.
Wage Theft in Australia — Now a Criminal Offence (2025)Wage theft is now a criminal offence in Australia with penalties of up to 10 years' imprisonment. Learn what counts as wage theft, how to report it, and your rights.
Haven't Been Paid? Here's Exactly What to Do (Step by Step) [2026]Your employer has not paid you. Follow this step-by-step guide to recover unpaid wages in Australia — from contacting your employer to FWO complaints, small claims, and the new wage theft laws.
Super Guarantee Rate 2025-26: Complete Employer & Employee Guide (12% SG)The definitive guide to Australia's 12% super guarantee rate for 2025-26. OTE rules, $65,070 max contribution base, quarterly deadlines, SG charge penalties, and free calculator to check your employer is paying correctly.