Au pairs are typically given board and some payment by an overseas family in return for minding children and doing light housework.
But many end up being effectively used as employees earning well below the minimum wage, the report says.
The Australian government said it did not tolerate "exploitative practices".
The study, billed as the biggest of its kind, surveyed 1,500 international au pairs working across Australia.
"The demand for au pairing is often explained by Australian families' need for affordable childcare," said co-author Laurie Berg from the University of Technology, Sydney.
"But we found that the majority of families were taking advantage of a large supply of working holidaymakers to get cheap housekeepers as well. So au pairs are working as full-time housekeepers but being paid like babysitters."