Cosmetics giant Lush will pay back $2 million to staff after admitting it had underpaid more than 5000 retail and manufacturing workers across Australia over the past eight years.

The large-scale underpayments, uncovered in an internal investigation and publicly revealed on Tuesday, were due to "serious payroll system errors", Lush Australia director Peta Granger said.

Lush Australia director Peta Granger announces a $2m national back-pay scheme. Credit:Ben Rushton

Part-time employees who worked overtime are expected to be the worst affected by the underpayments, with Lush saying some staff members could be as much as $10,000 out of pocket.

"We are deeply sorry to our valued staff and customers that we’ve failed to uphold the values that we have always believed in and the high standards that we’ve always sought to achieve," Ms Granger said. "We would never knowingly underpay. This was not deliberate. It goes against everything we value and believe in."