The Shangri-La Hotel in Sydney has admitted it underpaid staff an estimated $250,000 in wages after a review found employees had not received full entitlements to penalty rates and overtime.

The admission comes on the same day that jewellery chain Michael Hill also confessed it had underpaid its staff by as much as $25 million over the last six years.

A harbour view suite at the Shangri-La hotel in Sydney.

The hotel said it "sincerely apologises and deeply regrets" that it had failed to pay staff correctly, a statement from the Shangri-La read.

The hotel's general manager Philippe Kronberg said the underpayments were unacceptable and the hotel was taking steps to ensure it does not happen again.