Underpayment Risk Calculator (Australia)
Check your risk of underpaying employees based on common Fair Work risk factors. This tool helps identify potential exposure areas so you can act early.
Takes ~45 seconds · No login required · AU guidance only
Answer these questions
Risk assessment
Answer the questions to see your underpayment risk level
Risk score
0
Top risk drivers:
Potential exposure
Businesses with similar risk profiles may face backpay, penalties, and remediation costs if underpayment is identified.
Common risk factors
Time tracking gaps
Not recording actual hours makes underpayment harder to detect
Manual penalty calculations
Manual processes are prone to errors and omissions
Award uncertainty
Applying the wrong award is a leading cause of underpayment
This calculator assesses risk indicators only. It does not determine legal compliance or actual underpayment liability.
What causes employee underpayment?
Incorrect award application
Applying the wrong Modern Award, or misclassifying employees within an award, is one of the most common causes of underpayment. With over 120 Modern Awards in Australia, identifying the correct one can be complex.
Missed penalty rates
Failing to apply correct penalty rates for weekend work, public holidays, overtime, and late-night shifts is a frequent source of underpayment—particularly when calculations are done manually.
Unpaid or underpaid breaks
If employees work through breaks or breaks aren't properly recorded, the time may need to be paid. Many major underpayment cases involve break-related and overtime tracking issues.
Manual payroll errors
Spreadsheet-based payroll and manual data entry create opportunities for errors that accumulate over time, especially as award rates change annually.
Poor record-keeping
Without accurate time and attendance records, it's difficult to verify that employees have been paid correctly—and impossible to defend against underpayment claims.
Why underpayment risk matters
Fair Work investigations
The Fair Work Ombudsman actively investigates underpayment complaints and conducts proactive audits. Businesses of all sizes can be investigated—from small restaurants to mining giants like BHP. Read about Australia's largest underpayment cases.
Backpay orders
If underpayment is identified, businesses must repay all underpaid wages—potentially going back six years. This can be a significant financial burden.
Civil penalties
In addition to backpay, businesses may face civil penalties of up to $93,900 per contravention for companies (2024 rates). Individuals can also be personally liable. The 2024 Sushi Bay case resulted in record penalties—learn more about recent enforcement actions.
Brand and reputation damage
Underpayment cases are often publicised, damaging employer brand and making it harder to attract and retain staff. See how major Australian companies like Woolworths, Coles, and 7-Eleven faced public scrutiny.
How to reduce underpayment risk
Track actual hours worked
Use digital time and attendance systems to capture accurate start, finish, and break times for every shift.
Automate penalty rate calculations
Use software that automatically applies the correct penalty rates based on time of day, day of week, and overtime rules.
Record breaks accurately
Ensure break start and end times are recorded. Flag shifts where breaks may have been missed or shortened.
Review awards regularly
Award rates change annually. Review your pay rates after each Fair Work annual wage review to support compliance.
Reconcile pay runs
Before finalising each pay run, reconcile hours worked against hours paid. Identify and resolve discrepancies before payment.
Want to reduce underpayment risk automatically?
Upgrade to RosterElf for automatic time tracking, award interpretation, and accurate payroll data export.
Free Calculator
Perfect for quick risk assessments
- Assess underpayment risk factors
- Identify compliance gaps
- Get actionable recommendations
- No signup required
- Automatic award interpretation
- Digital time & break tracking
- Payroll export (Xero & MYOB)
- Compliance audit trail
Full Suite
Rostering, payroll & HR in one
per employee per month
+ GST, billed annually
Payroll & HR tools in one system
- Smart rostering & availability
- Time & attendance (GPS & photo)
- Award interpretation & penalties
- Payroll export (Xero & MYOB)
- HR Hub with employee profiles
- Digital onboarding & contracts
- Policies, certificates & compliance tracking
- Payroll sync with employee records
- Workwise AI compliance assistant
- Central document storage & management
- Leave management with approvals
No credit card required · 15-day free trial
Frequently asked questions
- Yes. Underpaying employees can result in backpay orders, civil penalties, and in serious cases, criminal prosecution under wage theft laws in some states. Learn from Australia's major underpayment cases including the 2025 criminal wage theft laws.
- No. It assesses risk indicators, not legal exposure or dollar amounts. It helps identify areas where underpayment may be more likely to occur.
- Yes. Business size does not remove compliance obligations. The Fair Work Ombudsman investigates businesses of all sizes, and small businesses are not exempt from penalties.
- Sometimes, but reconciliation against awards is required to ensure employees receive at least their minimum entitlements. Flat rates that result in underpayment are not compliant.
- No. This tool provides general guidance only. For specific advice about your compliance obligations, consult a qualified employment lawyer or the Fair Work Ombudsman.
Related resources
Explore guides, insights, and templates to help you get more from this tool.
Explore more free tools
Discover other calculators and compliance tools for your business.
Break compliance calculator
Check whether employee breaks are compliant based on shift length.
Backpay exposure estimator
Estimate potential backpay liability if employees have been underpaid.
Award misclassification checker
Check if employees may be misclassified under the wrong award or level.
AI employment contract generator
Generate draft employment contracts for casual, part-time, or full-time employees using AI.
AI roster generator
Generate draft staff rosters using AI based on your team size and shift requirements.
Modern award pay rate estimates
Get indicative pay rate estimates for common Australian awards. Verify with Fair Work.
Free roster builder
Build staff rosters instantly with our free drag-and-drop tool. No signup required.
Casual vs part-time calculator
Compare the estimated cost of casual vs part-time employment including loadings.
Disclaimer
This calculator provides general guidance only. It does not determine legal compliance or actual underpayment. For specific advice, consult a qualified professional.
Underpayment risk calculator – disclaimer & terms of use
Please read and accept the following terms before using this calculator.
1. Risk Indicators Only
This calculator identifies potential risk indicators for planning and educational purposes only. It does not determine actual underpayment or legal liability.
2. Not Legal or Compliance Advice
This tool does not provide legal, HR, or compliance advice. Underpayment risk depends on many factors including specific Modern Award provisions, enterprise agreements, and individual circumstances not captured by this tool.
3. User Responsibility
You are solely responsible for:
- conducting proper compliance audits with qualified professionals,
- verifying all pay calculations against applicable awards,
- seeking legal advice for any suspected underpayment issues.
4. No Determination of Compliance
A low risk score does not mean you are compliant with Fair Work obligations. A high risk score does not mean you have underpaid employees. Always verify with official sources and qualified professionals.
5. No Guarantee of Accuracy
While we aim to provide helpful guidance, we make no warranties about the accuracy, reliability, or completeness of the risk assessment.
6. Limitation of Liability
To the fullest extent permitted by law, RosterElf and its providers disclaim all liability for any loss, damage, or claims arising from the use of this calculator or reliance on its results.
Confirmation
I understand that this calculator identifies risk indicators only and is not a substitute for professional compliance advice. I will consult qualified professionals for any compliance concerns.
Please scroll to read all terms before accepting