Underpaid at work? What to do in Australia

Underpayment isn’t just about being paid less than you expected. It means being paid less than your legal entitlements under Australian workplace law. Common types of underpayment include:

• Unpaid hours — not being paid for all the time you actually worked, including time before or after your official shift.
• Below award rate — being paid less than the minimum hourly rate for your job classification under the relevant modern award.
• Missing penalty rates — not receiving the correct extra pay for weekends, public holidays, or late-night shifts.
• Incorrect overtime — not being paid at overtime rates when you’ve worked beyond your ordinary hours.
• Unpaid leave entitlements — not receiving correct payment for annual leave, sick leave, or public holidays.
• Missing casual loading — if you’re a casual employee, not receiving the 25% loading on top of the base rate.

The national minimum wage from 1 July 2025 was $24.95 per hour (or $948.10 per week). From 1 July 2026, the national minimum wage increases to $26.44 per hour (or $1,004.90 per week) for full-time and part-time employees. However, most employees are covered by an award that sets higher minimum rates based on their industry and job type. Your entitlements sit within the National Employment Standards and the award that applies to your role.

Before you do anything else, you need to understand what you should be getting paid and compare it to what you’ve actually received. A quick way to calculate what you may be owed is to map your underpaid hours against the correct rates.

Many underpayments are genuine mistakes. Payroll systems can be complex, and errors happen, especially with penalty rates, overtime calculations, or when employees work across different roles.

Before assuming the worst, it’s often worth having a calm, professional conversation with your employer or payroll team. Approach it as a question rather than an accusation.

Many employers will investigate and correct genuine errors once they’re aware of the issue. Give them a reasonable amount of time to look into it, typically a week or two.

If a verbal conversation doesn’t resolve the issue, or if you want a formal record, put your concerns in writing. This could be an email or a letter to your employer.

Keep your tone factual and polite. Many disputes are resolved at this stage once the employer sees that you’ve done your homework and are serious about the issue.

If you can’t resolve the issue directly with your employer, the Fair Work Ombudsman (FWO) is your next step. This is a free government service that helps employees and employers understand and resolve workplace issues.

To make a complaint, you can:

• Call the Fair Work Infoline on 13 13 94
• Submit an online enquiry or complaint through the Fair Work website
• Make an anonymous report if you’re concerned about retaliation

When you lodge a formal enquiry, Fair Work may first ask you to try to resolve it with your employer, then can move to mediation and, where needed, a formal investigation. Providing clear records — payslips, rosters, and your own calculations — helps them act faster.

If other avenues haven’t worked, you may be able to recover unpaid wages through the Federal Circuit and Family Court of Australia. For claims under $20,000, there’s a simplified “small claims” process.

Employers are legally required to provide payslips within one working day of paying you. Payslips must include specific information like your hourly rate, hours worked, and any deductions.

If you haven’t been receiving payslips, this is a red flag that should be addressed. Missing payslips can make it harder to prove underpayment, but it’s also a separate breach of workplace law.

If you don’t have payslips, use your bank statements to show what you were paid and any other records (rosters, timesheets, text messages about shifts) to show when you worked. The Fair Work Ombudsman can help even when documentation is limited.

Wage underpayment is widespread in Australia, and while some cases are intentional, many result from genuine confusion or administrative errors. Common reasons include:

• Complex awards — Australia has over 100 modern awards with different pay rates, classifications, and penalty structures. It’s easy for employers to misinterpret the rules.
• Manual rostering and timekeeping — when hours are tracked on paper or basic spreadsheets, errors can creep in. Many underpayment issues start with incorrect time records.
• Payroll system setup mistakes — if pay rates, penalty rules, or classifications are set up incorrectly in payroll software, the errors repeat every pay cycle.
• Changing award rates — minimum wages increase annually, and employers who don’t update their systems can fall behind without realising.
• Misclassification — employees may be classified at the wrong level under their award, resulting in lower pay than they’re entitled to.

None of these reasons excuse underpayment, but understanding why it happens can help you approach the conversation with your employer constructively. Many businesses genuinely want to pay correctly and will fix errors once they’re identified — often the root cause is manual payroll and award interpretation rather than bad intent. For a deeper look at how these errors build up, see our guide to payroll award interpretation mistakes that cause backpay.

You don’t have to navigate this alone. There are several free and low-cost resources available to help you understand your rights and recover unpaid wages.

Remember: asking about your pay is your right. Most underpayment issues can be resolved without conflict once the facts are clear. Take it one step at a time, keep records of everything, and don’t be afraid to seek help if you need it.