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The Headline Number is Rarely the Real Problem W hen payroll underpayments make the news, attention typically focuses on the amount repaid to employees. In Australia, those figures have reached hundreds of millions of dollars across retail, banking, higher education and healthcare. Yet in practice, the repayment amount is often only part of the story. The more significant cost frequently emerges after the issue is identified: years of forensic review, reconstruction of historical payroll data, complex remediation programs and sustained pressure on payroll, people, and legal teams. For many organisations, the cost of finding and proving what is owed rivals and sometimes exceeds the underpayment itself.
This is why payroll underpayments should no longer be viewed as isolated payroll errors. They are a symptom of deeper governance and compliance weaknesses. The 1:1 Ratio: When Remediation Equals Underpayment A rare public disclosure in Australia illustrates this clearly. In 2024, the University of Sydney reported to the New South Wales Parliament that it had spent AUD 21.6 million over four years on external consultants and advisers to review payroll records and calculate remediation payments. This was in addition to more than AUD 23 million paid to employees in underpayments. The near 1:1 ratio between underpayments and remediation cost is confronting. Most organisations never disclose this dimension of payroll failure. Yet similar patterns are increasingly visible. National Australia Bank has disclosed expected payroll remediation costs of AUD 130 million , increasing operating costs by 4.5 per cent year on year. Even for large, sophisticated employers, payroll remediation can become a material financial event.
This is why payroll underpayments should no longer be viewed as isolated payroll errors. They are a symptom of deeper governance and compliance weaknesses.
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GLOBAL PAYROLL MAGAZINE ISSUE 20
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