THE SHORT ANSWER

Compare what was owed
with what was paid.

To check for a payroll underpayment, establish the applicable pay rules, reconstruct the work performed, calculate the corresponding gross entitlement and compare it with recorded gross payments for the same work and period. Then investigate the evidence behind any shortfall.

A lower bank deposit alone does not establish an underpayment. Tax and deductions affect take-home pay; compare like-for-like gross amounts first. Fair Work explains that minimum wages are expressed before tax. Read the minimum-wage guidance.

This guide focuses on checking hourly wages. A complete entitlement review may also need separate checks for allowances, leave, superannuation and termination payments. Confirm the workplace-relations system that applies to the employer; seek advice where coverage or arrangements are unclear.

STEP 01

Confirm the rules that apply.

Identify the relevant Award or registered agreement, employment type and classification. Where no Award or agreement applies, check the appropriate award-free entitlements. An industry label or job title alone is not enough to decide coverage.

Check the duties actually performed against the classification descriptions. Keep the basis for the decision, and identify changes in duties, age or employment arrangements during the review period. Fair Work’s classification guidance explains what to consider.

Keep: the applicable instrument, classification evidence, employment terms and effective dates. Refer uncertain coverage, salaries, annualised arrangements or offset questions to a qualified adviser.

STEP 02

Gather a complete set of records.

Choose an employee and a clearly defined review period. A small sample can reveal an issue, but cannot establish that other employees or periods were paid correctly.

  • Employee facts: employment type, classification, relevant age and agreed pay rate.
  • Work performed: actual start and finish times, breaks, timesheets and roster changes.
  • Amounts paid: pay slips, payroll earnings lines, adjustments and back payments.
  • Arrangement evidence: written part-time hours, applicable agreements and relevant work cycles.

Keep original exports and a separate working reconciliation. Limit access to authorised people. Employers covered by the relevant Commonwealth laws must keep employee records for seven years; see Fair Work’s record-keeping guidance.

Keep: a list of records received and missing. Missing evidence is a question to resolve, not a reason to assume the payment was correct.

STEP 03

Reconcile the hours actually worked.

Match each payroll row to the employee and work date. Compare actual-work records with paid hours, then explain discrepancies such as edited clock entries, omitted shifts, duplicate rows or payroll cut-off timing.

Check how breaks were recorded and whether the applicable rules require payment. Do not automatically treat every recorded break as unpaid. For shifts crossing midnight, preserve the dates and times needed to apply the relevant rules.

Where eligibility depends on a week, fortnight or roster cycle, collect the complete period and relevant adjacent shifts. One pay slip may not contain enough information.

Keep: a dated reconciliation showing worked hours, paid hours and the reason for each adjustment. For WageReview preparation, use the payroll audit data checklist.

STEP 04

Check rates and additional entitlements.

Use the rate and rule version applicable to the work being reviewed. Verify the effective pay period for each change instead of applying today’s rate to every historical shift. Check any agreed higher rate as well as the relevant minimum.

  • Ordinary pay: correct classification, employment type and applicable rate.
  • Casual loading: whether it applies and how the published rate incorporates it.
  • Penalties and overtime: relevant day, time, location, hours and arrangement.
  • Minimum engagements: whether a short attendance requires a larger minimum payment.
  • Other entitlements: allowances, leave and other amounts requiring separate review.

Read the applicable clauses together. Do not assume overtime and penalties always add together, or add a loading that is already included in a rate. Use the Fair Work Pay and Conditions Tool and the applicable instrument to check your assumptions.

Keep: the rate source, effective dates, clauses and facts supporting each pay segment.

STEP 05

Compare matching gross amounts.

Set out expected gross pay and actual gross pay for the same entitlement, employee and period. Reconcile later adjustments before counting a difference twice. A useful review worksheet includes work date, pay segment, payable hours, rate, expected amount, paid amount and evidence.

SYNTHETIC EXAMPLE

Two ordinary hours missing from pay.

Assume eight verified ordinary payable hours at an agreed $30.00 per hour. Only six hours appear in the matching gross earnings. The rate is invented for illustration; it is not a published Award rate.

Recorded gross pay$180.006 hours × $30.00
Illustrative expected$240.008 hours × $30.00
Potential shortfall$60.00$240.00 − $180.00

Eligibility for ordinary hours is assumed. No overtime, loading, penalties or other entitlements are modelled. Check for a separate payment or adjustment before confirming the shortfall.

A matching total does not prove every entitlement was met. Retain individual differences; do not assume an apparent excess elsewhere can lawfully offset a shortfall.

Keep: the calculation and reconciliation, including both shortages and unexpected extra payments.

STEP 06

Investigate before confirming a finding.

Trace each difference back to its inputs. Was the shift omitted? Was a rate change missed? Did the same hours appear in another pay period? Was the expected calculation based on the wrong classification or an incomplete agreement?

Record whether the evidence supports a confirmed shortfall, explains the difference, or leaves a question unresolved. A software flag is a starting point for review; it cannot settle missing facts or legal interpretation.

Once a recurring cause is identified, extend the review to potentially affected employees and historical periods. Do not extrapolate one sample’s amount across the whole workforce.

Keep: the reviewer’s decision, evidence, unresolved questions and person responsible for follow-up.

STEP 07

Correct confirmed issues and check again.

Act promptly on a confirmed underpayment. Explain the calculation to the employee, arrange the appropriate back payment, record it in payroll records and obtain advice on associated tax and superannuation obligations where needed. Follow Fair Work’s underpayment correction guidance.

Address the underlying cause, whether it is a pay-code setting, outdated rate, missing time record or review process. Check the next relevant pay period and document whether the correction worked.

Escalate unresolved coverage, offset, salary or disputed-entitlement questions to a qualified workplace-relations adviser or Fair Work. Keep the review open while material questions remain unanswered.

Keep: the correction record, employee communication and follow-up check.

FROM RECORDS TO REVIEW

Where WageReview can help.

WageReview’s controlled demo compares paid amounts with supported deterministic hourly-pay calculations and shows pay segments and source evidence for human review.

Current scope covers represented outcomes under the Retail, Hospitality and Restaurant Awards, for casual, part-time and hourly full-time employees. New audit periods must start on or after 1 July 2025; some outcomes require complete roster and arrangement evidence.

It does not establish legal Award coverage or provide a complete entitlement audit. Tax, superannuation, leave, termination and salary or annualised-wage reconciliation are outside its calculations. Production use is not approved, and it does not automatically correct payroll.

Explore the review workflow · Prepare your records

Common questions.

Can paying above the base Award rate prevent every underpayment?

A higher base rate alone does not establish that all applicable entitlements were met. Check the arrangement and each relevant entitlement; seek advice on any claimed offset.

Can I check only the bank deposit?

Use gross earnings for the entitlement comparison. Reconcile net pay and bank transfers separately, including deductions, timing and split payments.

Does a zero difference mean full compliance?

It only means the compared amounts match under the facts and scope used. Missing records, excluded entitlements and incorrect assumptions still need attention.

Can employees use this process?

Yes. Gather your pay slips and work records, check the applicable rules and raise specific questions with your employer. Fair Work also provides guidance when your pay does not seem right.

Official sources and next steps.

Check the current official instrument and the version relevant to the review period. These references support the general checking process; they do not verify the illustrative calculation.

General information for payroll review. Not legal advice. Obtain advice for the circumstances of a particular employee or employer.