BACKGROUND: The broad aim of this study was to assess the contribution of job strain to mental health inequalities by (a) estimating the proportion of depression attributable to job strain (low control and high demand jobs), (b) assessing variation in attributable risk by occupational skill level, and (c) comparing numbers of job strain-attributable depression cases to numbers of compensated 'mental stress' claims. METHODS: Standard population attributable risk (PAR) methods were used to estimate the proportion of depression attributable to job strain. An adjusted Odds Ratio (OR) of 1.82 for job strain in relation to depression was obtained from a recently published meta-analysis and combined with exposure prevalence data from the Australian state of Victoria. Job strain exposure prevalence was determined from a 2003 population-based telephone survey of working Victorians (n = 1101, 66% response rate) using validated measures of job control (9 items, Cronbach's alpha = 0.80) and psychological demands (3 items, Cronbach's alpha = 0.66). Estimates of absolute numbers of prevalent cases of depression and successful stress-related workers' compensation claims were obtained from publicly available Australian government sources. RESULTS: Overall job strain-population attributable risk (PAR) for depression was 13.2% for males [95% CI 1.1, 28.1] and 17.2% [95% CI 1.5, 34.9] for females. There was a clear gradient of increasing PAR with decreasing occupational skill level. Estimation of job strain-attributable cases (21,437) versus "mental stress" compensation claims (696) suggest that claims statistics underestimate job strain-attributable depression by roughly 30-fold. CONCLUSION: Job strain and associated depression risks represent a substantial, preventable, and inequitably distributed public health problem. The social patterning of job strain-attributable depression parallels the social patterning of mental illness, suggesting that job strain is an important contributor to mental health inequalities. The numbers of compensated 'mental stress' claims compared to job strain-attributable depression cases suggest that there is substantial under-recognition and under-compensation of job strain-attributable depression. Primary, secondary, and tertiary intervention efforts should be substantially expanded, with intervention priorities based on hazard and associated health outcome data as an essential complement to claims statistics.