Underpayment exposure calculator

Estimate the back pay owed for an underpayment, the maximum civil penalty per contravention for your type of business, and the wage theft offence maximum if the underpayment was deliberate.

Figures checked 5 November 2026. Free to use, no sign-in.

The underpayment

$

Wages, penalty rates, allowances, leave and super under the award or agreement.

years

Claims can go back 6 years.

The employer

Count employees as at today. Casuals count only if they work regularly and systematically.

Changes which maximum applies. Not sure shows the ordinary maximum.

Your estimate

Estimated back pay owed

$20,000

5 employees × 2 years

Back pay per employee
$4,000
Maximum civil penalty per contravention
$109,200
300 penalty units
If knowing or reckless (serious contravention)
$1,092,000
  • Back pay is an estimate: average underpayment × employees × years, up to 6 years. A court can also order interest. Late or unpaid super also attracts the super guarantee charge, paid to the ATO.
  • Penalties are maximums per contravention, at $364 a penalty unit for contraventions from 1 July 2026 ($330 before then). A course of conduct can be treated as one contravention, and courts rarely impose the maximum.
  • Fixing the underpayment quickly and telling the Fair Work Ombudsman is treated favourably. A small business that followed the Voluntary Small Business Wage Compliance Code cannot be referred for prosecution for that underpayment (s 327B).

An estimate and general information, not legal advice.

How this works

Back pay is your average yearly underpayment per employee, times the number of employees, times the years it has gone on, capped at the 6-year limit in s 544. It is an estimate: an exact figure needs each employee’s pay records against the award or agreement for each period.

Civil maximums come from s 539(2) (60 penalty units for breaching the NES, an award or an agreement, or 600 for a serious contravention) and s 546: five times for a company, and five times again for a company that isn’t a small business employer (15 or more employees). A penalty unit is $364 for contraventions from 1 July 2026.

The wage theft figures come from s 327A, which needs intention. Choosing “Not sure” shows the ordinary maximum, never the serious or criminal one.

Legal basis

Checked against these sources on 5 November 2026. Spotted a figure that looks wrong? Tell us.

Questions

How far back can employees claim underpaid wages?

Six years. An application to a court for an order about a contravention of the Fair Work Act, an award or an agreement must be made within 6 years after the contravention (s 544).

What are the maximum penalties for underpaying staff?

Per contravention, from 1 July 2026: $21,840 for an individual, $109,200 for a company with fewer than 15 employees and $546,000 for a company with 15 or more. For a serious contravention (knowing or reckless) the maximums are ten times higher. A company with 15 or more employees can instead face 3 times the underpayment if that is higher.

Is underpaying wages a crime?

Intentional underpayment has been a criminal offence since 1 January 2025 under s 327A of the Fair Work Act. Individuals face up to 10 years in prison. The maximum fine is the greater of 3 times the underpayment and 5,000 penalty units for an individual or 25,000 penalty units for a company. Honest mistakes are not covered.

What is a serious contravention?

One where the employer knowingly contravened the law, or was reckless: aware of a substantial risk that it would happen and unjustifiably taking that risk (s 557A). A company knowingly contravenes if it authorised the contravention, expressly or by implication.

What should we do if we find an underpayment?

Fix pay going forward, work out back pay for each affected employee including super and interest, pay it, and consider telling the Fair Work Ombudsman. Keep records of the review and the changes you made, since cooperation and corrective action count in your favour.

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Questions the calculator can’t answer?

Workfloor answers pay, award, leave and termination questions for your team, with the Fair Work Act section or award clause behind each answer.

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