What is my exposure if I've underpaid staff?

Two layers. First, back-pay — the wages and entitlements you owe, generally recoverable for up to 6 years (per worker, per year, times the number of workers). Second, Fair Work civil penalties on top, charged per contravention. Across published enforcement records the Fair Work Ombudsman has recovered over $601 million in back-pay from 185 enforceable undertakings covering more than 153,000 workers, and secured $67.9 million in court penalties across 516 litigation outcomes. This tool estimates your back-pay and shows you the real, comparable outcomes for businesses in your industry.

Is underpaying staff a criminal offence in Australia?

Since 1 January 2025, INTENTIONAL underpayment of wages or superannuation is a Commonwealth criminal offence (wage theft) under the Closing Loopholes reforms — punishable by large fines and up to 10 years' imprisonment. An honest mistake is not criminal; a deliberate or reckless underpayment can be. Small businesses that comply with the Voluntary Small Business Wage Compliance Code may be shielded from criminal referral.

What should I do if I find an underpayment?

Fix it forward immediately (correct the next pay run), calculate the full back-pay owed, and consider voluntary self-disclosure to the Fair Work Ombudsman. Self-disclosure is consistently treated favourably — it typically results in an enforceable undertaking to repay workers rather than prosecution. Keep clean records of what you found and how you fixed it.

How far back can underpaid wages be claimed?

Underpayment claims under the Fair Work Act can generally reach back 6 years from the date a claim is made. This estimator caps the recoverable period at 6 years even if the underpayment has run longer, so the figure isn't overstated.

Underpayment Exposure Estimator

Estimate your business's real Fair Work exposure if staff are underpaid — back-pay, penalties and criminal wage-theft risk, benchmarked against actual FWO enforcement outcomes for businesses like yours.

Last verified: 8 July 2026

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General information and estimates only — not legal, financial or tax advice. Always check your specific award, agreement or contract, or a qualified professional, before you rely on the result.

Underpayment Exposure Estimator

The document is free. The process is the risk.

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