Understanding sea level during the warmest peak of the Last Interglacial (125,000 yrs ago; Marine Isotope Stage 5e) is important for assessing future ice-sheet dynamics in response to climate change, and relies on the measurement and interpretation of paleo sea-level indicators, corrected for post-depositional vertical land motions. The coasts and continental shelves of northeastern Australia (Queensland) preserve an extensive Last Interglacial record in the facies of coastal strandplains onland and fossil reefs offshore. However, there is a discrepancy (amounting to tens of meters) in the elevation of sea-level indicators between offshore and onshore sites. Here, we assess the influence of geophysical processes that may have changed the elevation of these sea-level indicators since the Last Interglacial. We modeled sea-level change due to: i) dynamic topography; ii) glacial isostatic adjustment, and iii) isostatic adjustment due to coral reef loading, which we term "reef isostasy". These processes caused relative sea-level changes on the order of, respectively, 10 m, 5 m, and 0.3 m since the Last Interglacial. Of these geophysical processes, the dynamic topography predictions most closely match the tilting observed between onshore and offshore sea-level markers. However, we found that these combined geophysical processes cannot explain the full amplitude of the observed discrepancy between onshore and offshore sea-level indicators.