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Underpayments and overpayments

Information about what a person can do if their employer pays them too much of not enough.

If an employee is underpaid

The Fair Work ombudsman can help to recover money owed. To find out the correct rate of pay for particular industries, contact the Fair Work Ombudsman's Fair Work Infoline (link below).

Unions can also help.

See 'Getting paid and payslips' in JobWatch—Publications (link below)

If an employee is accidently overpaid by their employer

The Fair Work Act does not specifically deal with an employer's entitlements to reclaim money accidentally paid by the employer, although a registered workplace agreement may include a term that deals with this.

If an employer makes an error and pays an employee more than they are entitled to, the employee will usually have to repay the money (make restitution) if they are asked to.

However this does not mean that they have to pay all of the money back at once.

Important factors to consider may be:

  • how long ago the extra money was paid
  • how much money was involved
  • whether the employee has left the organisation
  • the financial circumstances of the employee
  • whether the employee has spent the money (in good faith).

The employer should contact the employee and tell them about the mistake. They must not simply stop paying the employee until the debt is paid back. They will have to follow the law about permitted deductions that is set out in s. 324 of the Act. Generally the employer will need prior written authority to deduct payments from an employee's wages.

The employee could try to negotiate that the money is paid back in instalments. The repayment should not cause hardship to the employee.

Investigation by the Fair Work Ombudsman

If the employer does not follow the law the employee may lodge a complaint with the Fair Work Ombudsman.

If a deduction results in the employee being underpaid, the Ombudsman may be able to enforce back-pay to make up for the loss. The investigation process is set out in the Fair Work Ombudsman's Guidance note 8 (link below).

Who else may help

The law is complex, employees could also contact their union or a private lawyer.

More information


Fair Work Act 2009 (Cth)

  • s. 324—permitted deductions an employer may deduct an amount payable to an employee if the deduction is authorised by the employee
  • s. 253—terms of an enterprise agreement are of no effect if it permits deductions for the benefit of an employer and is unreasonable in the circumstances
  • Part 2-9—other terms and conditions of employment
  • s. 326—certain terms in a modern award, enterprise agreement or contract of employment has no effect if it permits an employer to deduct an amount from a sum payable to an employee and it is unreasonable in the circumstances

See Fair Work Act 2009 (Cth)(opens in a new window)

Fair Work Ombudsman (FWO)

The Ombudsman site has information to help calculate the correct amount of pay and to support employees who have not been payed the correct amount.


Note: Information about the role of the FWO in investigating a breach of the Act if unlawful deductions have been made by the employer were given by the FWO November 2011.


This specialist community legal centre has information about various pay issues.


  • 'Getting paid and payslips'
  • 'Unlawful wage deductions'

in JobWatch—Publications(opens in a new window)

ACTU Worksite

The site has information to help students. It includes a 'Top jobs' page which lists the pay, education requirements and union covers for many jobs alphabetically. the money. Tip, click on There also some quizzes to test knowledge about bullying and back pay.

See ACTU—Worksite—Your rights at work for students(opens in a new window)