Foodora Australia, which exited the market in August, underpaid its workers $5.5 million according to a creditors report by the company's administrator.

The company's German parent will pay back less than half of the $8m it owes workers and the Australian Taxation Office, according to media reports.

Administrator Worrells has suggested creditors accept a deed of company arrangement that would see the home delivery company pay back $3 million.

According to Worrells, delivery riders and drivers should have been classified as casual employees instead of contractors, which led to the underpayments.

Foodora Australia is also still embroiled in an alleged unfair dismissal case on behalf of former delivery rider in the Fair Work Commission.