Your Payroll Software Might Be Right — and Your Employees Could Still Be Underpaid
Written by: Melissa Cunliffe (CA)
If Xero or another payroll system calculates wages automatically, can you assume everyone is being paid correctly?
Unfortunately, no.
What has changed?
On 14 October 2026 the Fair Work Ombudsman announced an enforceable undertaking by Sunnyfield after underpayments of about $5.43 million, including interest and super, affecting 1,767 current and former employees.
The main issue was failure to progress employees to the correct pay points.
This does not mean payroll software caused the problem; it shows that incorrect settings or employment classifications can flow through otherwise accurate calculations.
Writing Payroll Software and Employee Pay Accuracy
Why should you care?
Imagine an employee’s award requires movement to a higher pay point once particular conditions are met.
The payroll software faithfully pays the hourly rate entered years earlier. Every payslip adds up correctly, but the underlying rate is no longer the required rate. Multiply a small hourly shortfall by years of shifts, allowances and super and the numbers grow.
What we are seeing in practice
A small service business asks, “We never miss a pay day — what else do we need to check?”.
Start with the employee’s actual duties, their classification, any progression requirements, and the applicable award or agreement. Also check overtime, allowances, penalty rates, leave and records.
What can you do now?
Confirm which modern award or enterprise agreement applies to each employee.
Review actual duties against the recorded classification and progression requirements.
Check common pay variations: weekends, overtime, allowances, leave and super.
Document reviews, correct issues promptly and obtain specialist employment advice where needed.
Something to think about
When was the last time someone checked the rules behind the pay rates, rather than just whether the payslips were processed?
At 4P’s Future Accounting, we help family businesses understand the numbers, protect what they have built and plan for what comes next. The right answer depends on your circumstances, so obtain specific advice before acting.
Not sure whether your payroll settings and employee classifications are correct?
Contact 4P's Future Accounting to discuss your payroll records and business reporting needs.
Disclaimer
This article does not constitute financial advice and is for general information only. It does not take into account any individual’s personal objectives, situation or needs, and is not intended as professional advice. Any similarity to an individual’s personal circumstances and the examples provided in this article is purely coincidental. Any person acting upon such information without receiving specific advice, does so entirely at their own risk.
Authorisation under an Australian Financial Services Licence (AFSL) is not required in the provision of this article and the author plus Future Accounting Group Pty Ltd is not acting in its capacity as an Australian Financial Services Licence holder
Liability limited by a scheme approved under professional standards legislation.
