National Australia Bank (NAB) has agreed to repay approximately A$169 mn to 65,999 current and former employees following a 14-year payroll underpayment scandal affecting workers across Australia.
The agreement with the Fair Work Ombudsman (FWO) includes an Enforceable Undertaking requiring the bank to complete outstanding employee compensation, strengthen payroll controls and make a record A$2 mn contrition payment to the Commonwealth Consolidated Revenue Fund.
- National Australia Bank (NAB) has signed an Enforceable Undertaking with the Fair Work Ombudsman covering 65,999 employees affected by payroll underpayments between 2012 and 2026.
- The bank’s total remediation costs amount to approximately A$169 mn, including interest and superannuation, with individual payments ranging from less than A$5 to more than A$87,000.
- NAB will make a record A$2 mn contrition payment and upgrade its payroll compliance systems following failures that continued for seven years after the bank first reported the problems.
The remediation package includes around A$127 mn in underpaid wages and entitlements, with additional interest and superannuation payments.
NAB first disclosed significant payroll problems to the regulator in late 2019, but subsequent reviews found that incorrect payments continued until 2026.
NAB payroll underpayments affect nearly 66,000 employees
The underpayments affected casual, part-time and full-time employees across every Australian state and territory.
Individual compensation amounts range from less than A$5 to more than A$87,000, including interest and superannuation. The Fair Work Ombudsman reported an average back payment of approximately A$1,934.
The affected entitlements included base wages, overtime, allowances, leave, public holiday payments, redundancy benefits, termination payments and superannuation. Payroll errors were identified across multiple employment categories and business divisions.
Among the largest categories of underpayments were:
- A$37.9 mn resulting from incorrect base pay calculations for part-time employees.
- A$16.4 mn associated with errors in fortnightly payroll calculations.
- A$5.7 mn in insufficient superannuation contributions for employees on parental leave.
Fair Work Ombudsman inspectors examined approximately 550,000 lines of payroll data to verify the underpayments.
The regulator identified problems with the application of enterprise agreement provisions, employee working-hour records and the calculation of statutory and contractual entitlements.
Payroll errors continued seven years after NAB reported them
NAB initially notified the Fair Work Ombudsman of significant payroll discrepancies in 2019 after discovering errors in the implementation of its enterprise agreement.
The bank subsequently undertook a broader review, which identified compliance failures extending back to 2012. Despite the investigation and remediation work, the problems were not fully resolved.
When implementing a new enterprise agreement in 2024, NAB discovered that earlier corrective measures had failed to address several underlying issues. Some employees continued receiving incorrect payments until 2026.
The bank attributed the failures to weaknesses in payroll governance, inadequate compliance oversight, outdated technology and deficient record-keeping. These problems prevented NAB from consistently verifying that employees received at least their minimum legal entitlements.
NAB Group Executive of People & Culture Sarah White apologised for the errors. “We take our payroll obligations extremely seriously as a basic element in employing people,” White said. “We sincerely apologise for these unintended errors. We have and will continue to remediate anyone who has been impacted.”
Fair Work Ombudsman secures record A$2 mn payment
Under the Enforceable Undertaking, NAB will make a A$2 mn contrition payment, the largest ever included in such an agreement with the Fair Work Ombudsman.
The payment is separate from the amounts owed to employees and will be transferred to the Commonwealth Consolidated Revenue Fund.
Fair Work Ombudsman Anna Booth described the prolonged underpayments as particularly disappointing given NAB’s size and resources.
The regulator considered an Enforceable Undertaking appropriate because NAB had cooperated with its investigation and undertaken substantial remediation work.
The A$2 mn contrition payment represents approximately 0.03% of NAB’s A$6.1 bn annual profit. The bank generated A$22 bn in revenue during its last financial year.
Booth said the penalty was determined after considering the complexity of the payroll failures, NAB’s remediation efforts and the number of employees affected.
Contrition payments are assessed individually rather than being subject to a predetermined escalation schedule.
NAB to strengthen payroll compliance and independent oversight
NAB has already repaid approximately A$155 mn to affected employees and is continuing efforts to identify and compensate any remaining workers.
The Enforceable Undertaking requires the bank to complete its remediation program and improve the systems responsible for payroll accuracy.
NAB plans additional investment in human resources technology, payroll administration, compliance procedures and employee entitlement calculations.
An independent auditor appointed by the bank will assess the effectiveness of these measures.
The agreement is intended to address both the historical underpayments and the deficiencies that allowed them to continue after their initial identification.
Finance Sector Union criticises NAB over wage failures
The Finance Sector Union (FSU) criticised the scale and duration of the underpayments, particularly following NAB’s recent announcement of plans to eliminate approximately 2,500 jobs.
FSU national president Wendy Streets said it was unacceptable for a major financial institution to have made payroll errors affecting so many employees over such an extended period.
The case adds to a series of large-scale wage underpayment investigations involving major Australian employers, including universities, retailers and professional services firms.
Employers have frequently attributed payroll failures to complex industrial awards and enterprise agreements containing provisions accumulated over many years.
Unions argue that businesses remain responsible for maintaining adequate payroll resources and compliance controls, regardless of the complexity of employment arrangements or their increasing reliance on outsourced systems and automation.
For NAB, the undertaking establishes a formal remediation and compliance framework after payroll failures that began in 2012 and persisted despite the bank’s initial disclosure to regulators in 2019.
