Australia’s criminalisation of wage underpayment with severe penalties makes payroll accuracy a criminal liability issue for EOR providers and their clients operating in the country.
Australia has become the first major economy to make intentional wage underpayment a federal criminal offense, introducing penalties that include up to 10 years imprisonment for individuals and fines of AUD 8.25 million for corporations.
The new laws target directors, CFOs, payroll managers, and even external accountants involved in underpayment schemes. Individual penalties can reach either 10 years imprisonment or three times the amount underpaid, whichever is greater. Corporate fines are set at AUD 8.25 million or three times the underpayment amount.
Additionally, from 1 July 2026, Australia will implement Payday Super, requiring superannuation contributions to be paid with wages rather than quarterly. This represents a fundamental shift in payroll processing that will affect all employers operating in Australia.
For EOR providers serving Australian clients, these changes elevate payroll accuracy from an operational concern to a criminal liability issue. The severity of penalties suggests Australian regulators view wage compliance as a board-level governance matter requiring the highest levels of internal controls and oversight.
source: Papaya Global