Wage Audits and Compliance: What Every Business Needs to Know
Wage Audits and Compliance: What Every Business Needs to Know
What Is a Wage Audit?
A wage audit is a detailed review of your payroll data, employee records, and award interpretations to ensure staff are paid correctly and in line with industrial relations laws.
The goal is to verify that wage payments comply with modern awards, enterprise agreements, overtime, allowances, superannuation, and other entitlements.
Unlike a standard payroll check, a wage audit provides independent assurance — showing your business, board, and regulators that your systems are accurate and compliant.
Why Wage Compliance Is a Critical Business Risk
Over the past decade, wage compliance has evolved from an HR responsibility into a board-level issue. The introduction of wage theft laws in Australia has raised the stakes for employers, directors, and advisors alike.
Underpayment claims have led to major financial penalties, reputational fallout, and legal exposure for companies that failed to detect or report issues early.
Directors are now expected to have visibility over payroll accuracy as part of their governance duties. Regulators have made it clear that ignorance is not a defence — proactive wage audits are now best practice for any organisation managing complex pay arrangements.
How Often Should You Conduct a Wage Audit?
One of the most common questions business leaders ask is, “How often should we audit our wages?”
While there’s no universal rule, most experts recommend the following:
- Annually for small and mid-sized businesses with stable workforces
- Quarterly or semi-annually for larger, high-turnover, or shift-based industries such as hospitality, healthcare, and construction
- Immediately after change events — such as implementing a new payroll system, award update, or enterprise agreement
- Proactively before regulator reviews or procurement tenders
The cost of regular auditing is minor compared to the potential liability of back payments, interest, penalties, and legal costs.
What Are the Most Common Causes of Wage Non-Compliance?
Many underpayments aren’t deliberate. They’re caused by process gaps or system complexity. Common wage compliance failures include:
- Misclassification of employees under the wrong award or pay level
- Failure to apply overtime, allowances, or penalty rates correctly
- Legacy payroll software that doesn’t match modern award rules
- Manual overrides without adequate checks
- Missing documentation to verify entitlements
Even small inconsistencies can accumulate across pay cycles — resulting in large retrospective liabilities.
What Happens If You Fail a Wage Audit?
Failing a wage audit can trigger a cascade of legal and financial consequences. Depending on the issue, businesses may face:
- Back payments with interest to affected employees
- Civil penalties and fines from the Fair Work Ombudsman
- Public disclosure requirements, impacting brand trust
- Potential director liability for serious or systemic breaches
- Reputational damage that affects recruitment and procurement
More than one-third of Fair Work investigations now result in businesses being found non-compliant. For larger employers, remediation can stretch into millions of dollars and take years to resolve.
How Much Does a Wage Audit Cost?
The cost of a wage audit depends on workforce size, payroll complexity, and data quality. For smaller organisations, basic reviews can start from a few thousand dollars.
However, the real value of an audit lies in preventing future exposure. Many clients use Subi’s technology to automate large portions of the review process, drastically reducing both time and cost.
By connecting directly to payroll systems and automating award interpretation, Subi can complete wage audits in days rather than months — without the overhead of manual reviews.
How to Ensure Ongoing Wage Compliance
Wage compliance isn’t a one-off project — it’s an ongoing discipline. Businesses that succeed in maintaining compliance follow a consistent cycle:
- Assess: Identify which awards and entitlements apply to each employee.
- Audit: Run wage audits regularly using accurate, real-time payroll data.
- Rectify: Address and document any discrepancies immediately.
- Monitor: Track compliance KPIs and maintain transparent reporting.
- Automate: Use technology to reduce manual risk and improve accuracy.
Subi helps businesses achieve this by integrating compliance directly into their payroll workflow. Our tools identify risks early, generate audit-ready reports, and make it easy to prove compliance to regulators or boards.
How Subi Helps Simplify Wage Audits and Compliance
Subi was built to solve one of the biggest challenges in employment law — making wage audits fast, defensible, and transparent.
Our system connects directly to major payroll platforms to ingest payslips, timesheets, and leave data. Automated award logic then checks every line against relevant pay rules and flags anomalies for review.
The result: compliance-grade reporting that meets regulatory and governance standards, while reducing manual effort and cost.
We also support law firms, accounting firms, and HR consultants through white-label solutions and the Subi Marketplace — where businesses can connect directly with verified compliance experts.
When Should You Engage a Wage Compliance Specialist?
Consider professional assistance when:
- Your payroll covers multiple awards or enterprise agreements
- You’re expanding into new sectors or states with different pay rules
- You suspect historical underpayments or have received employee complaints
- Your business is preparing for a due diligence review or regulatory audit
Subi partners with legal, accounting, and HR professionals across Australia to provide defensible, technology-backed audit reports suitable for board, client, or regulator submission.
Final Thoughts: Make Wage Compliance a Cultural Priority
Wage compliance isn’t just about avoiding penalties — it’s a reflection of your organisation’s values. Getting payroll right shows employees that you respect their time, their work, and their trust.
Regular wage audits transform compliance from a cost into a competitive advantage. They protect leadership, strengthen governance, and reinforce culture.
Subi helps businesses turn compliance from a reactive process into a proactive strength.
Schedule a wage audit or book a spot check today at www.subi.au to see how our technology can help protect your business.