The Corrections Department aims to begin paying back staff for any shortfalls due to complications with the Holidays Act later this year.
It expects a $16 million contingency it got in last year's Budget should cover its liabilities to more than 9000 staff underpaid due to leave and shiftwork miscalculations.
"We are determined to get this right for our staff and aim to begin paying any shortfalls in late 2019," Richard Waggott, deputy chief executive corporate services, said in a statement.
Corrections finished fixing its payroll system last November. RNZ has asked the department what this cost: MBIE's bill for fixing its payroll ran to more than $20m, with reimbursements to staff on top of that.
It was now undertaking the "hugely complex" task of recalculating payments, Mr Waggott said.
There are two options for this work - recalculation or estimation. The Labour Inspectorate earlier told RNZ it was advising that estimation could lead to a quicker payout.
But Mr Waggott said "calculation of arrears ensures that we are using our taxpayer-funded resources responsibly, as estimation increases the risk of inaccuracies. We want to complete the exercise once only, and as accurately as possible".
It was working closely with unions on this, he said.