A preservative used in about half of all disposable baby wipes is causing an allergic reaction in a large number of people, a study has found.

The research, published in the Medical Journal of Australia, shows rates of allergic reaction to the chemical methylisothiazolinone, known as MI, have risen from less than 4 per cent to 11 per cent in two years.

The researchers say the chemical is now the most common cause of allergic contact dermatitis, which appears as a rash on the skin, in their patients.

MI is also found in shampoos, moisturiser, sunscreens and deodorants, as well as paints, cooling tower water and cutting water.

Rosemary Nixon of the Skin and Cancer Foundation, which conducted the research, says it is unusual to have as many as one in 10 people allergic to a product.

"These are really high rates of allergy. I've actually never seen rates as high as this," she said.

"Interestingly, it's happening in the developed world.

"All over the world manufacturers are taking notice and in Europe, industry has recognised that this preservative needs to be eliminated."

Ms Nixon says the issue is mostly likely more widespread than people think.

"There are probably more people getting rashes from this than we realise," she said.

"If people have got a rash through a deodorant it's as simple as them just checking the bottle for the ingredient and seeing if it's present, and if it is, just buying an alternative product."

Dermatologist Jennifer Cahill says the Skin and Cancer Foundation has included a test for an allergic reaction to MI in allergy tests since 2011.

"MI is now the most common cause of allergic contact dermatitis in our patient population," she said.

"Interestingly it is parents using baby wipes on their children who are presenting with hand dermatitis, although it is likely that allergic contact dermatitis involving the groin in children may not be diagnosed accurately."