Groundwater management in Australia is complicated by the cost and scarcity (vs. spatial variability) of bore monitoring. Gravity Recovery and Climate Experiment (GRACE) remote sensing may alleviate this problem, but derived groundwater storage estimates are subject to errors, particularly, in total water storage (TWS) retrieval and in estimated soil moisture contributions to TWS. We quantified the uncertainties from both sources over Australia. In addition, for 12 regions we compared groundwater changes derived from GRACE with up-scaled groundwater bore measurements. Favourable agreement was found for regions with many bores, but a direct comparison was complicated by the scarcity and biased positioning of bores; uncertainty in soil moisture model assumptions; and uncertainty in the aquifer property that translates groundwater level into storage. Further improvements in spatial GRACE TWS resolution and in soil moisture estimation accuracy will be required to increase the utility of GRACE for groundwater management.