diff --git a/internal/parallelwork/parallel_work_queue.go b/internal/parallelwork/parallel_work_queue.go
index 855e539b4..144c385bf 100644
--- a/internal/parallelwork/parallel_work_queue.go
+++ b/internal/parallelwork/parallel_work_queue.go
@@ -1,4 +1,4 @@
-// Package parallelwork implements pallel work queue with fixed number of workers that concurrently process and add work items to the queue.
+// Package parallelwork implements parallel work queue with fixed number of workers that concurrently process and add work items to the queue.
 package parallelwork
 
 import (
diff --git a/internal/parallelwork/parallel_work_queue_test.go b/internal/parallelwork/parallel_work_queue_test.go
new file mode 100644
index 000000000..9b98f307f
--- /dev/null
+++ b/internal/parallelwork/parallel_work_queue_test.go
@@ -0,0 +1,241 @@
+package parallelwork_test
+
+import (
+	"context"
+	"errors"
+	"sync"
+	"sync/atomic"
+	"testing"
+	"time"
+
+	"github.com/stretchr/testify/require"
+
+	"github.com/kopia/kopia/internal/parallelwork"
+)
+
+func TestEnqueueFrontAndProcess(t *testing.T) {
+	queue := parallelwork.NewQueue()
+
+	results := make(chan int, 3)
+
+	// Enqueue work items to the front of the queue
+	queue.EnqueueFront(context.Background(), func() error {
+		results <- 3
+		return nil
+	})
+	queue.EnqueueFront(context.Background(), func() error {
+		results <- 2
+		return nil
+	})
+	queue.EnqueueFront(context.Background(), func() error {
+		results <- 1
+		return nil
+	})
+
+	err := queue.Process(context.Background(), 2) // Use two workers
+	require.NoError(t, err)
+
+	close(results)
+
+	var sum int
+	for res := range results {
+		sum += res
+	}
+
+	require.Equal(t, 6, sum)
+}
+
+func TestEnqueueBackAndProcess(t *testing.T) {
+	queue := parallelwork.NewQueue()
+
+	results := make(chan int, 3)
+
+	// Enqueue work items to the back of the queue
+	queue.EnqueueBack(context.Background(), func() error {
+		results <- 1
+		return nil
+	})
+	queue.EnqueueBack(context.Background(), func() error {
+		results <- 2
+		return nil
+	})
+	queue.EnqueueBack(context.Background(), func() error {
+		results <- 3
+		return nil
+	})
+
+	err := queue.Process(context.Background(), 2) // Use two workers
+	require.NoError(t, err)
+
+	close(results)
+
+	var sum int
+	for res := range results {
+		sum += res
+	}
+
+	require.Equal(t, 6, sum)
+}
+
+func TestProcessWithError(t *testing.T) {
+	queue := parallelwork.NewQueue()
+
+	testError := errors.New("test error") //nolint:goerr113
+
+	// Enqueue work items, one of them returns an error
+	queue.EnqueueBack(context.Background(), func() error {
+		time.Sleep(100 * time.Millisecond)
+		return nil
+	})
+	queue.EnqueueBack(context.Background(), func() error {
+		return testError
+	})
+	queue.EnqueueBack(context.Background(), func() error {
+		time.Sleep(100 * time.Millisecond)
+		return nil
+	})
+
+	err := queue.Process(context.Background(), 2) // Use two workers
+	require.Equal(t, testError, err)
+}
+
+func TestWaitForActiveWorkers(t *testing.T) {
+	queue := parallelwork.NewQueue()
+
+	results := make(chan int, 3)
+
+	queue.EnqueueBack(context.Background(), func() error {
+		time.Sleep(100 * time.Millisecond)
+		queue.EnqueueBack(context.Background(), func() error {
+			results <- 2
+			return nil
+		})
+		results <- 1
+		return nil
+	})
+
+	err := queue.Process(context.Background(), 1) // Use only one worker
+	require.NoError(t, err)
+
+	close(results)
+
+	var sum int
+	for res := range results {
+		sum += res
+	}
+
+	require.Equal(t, 3, sum)
+}
+
+func TestProgressCallback(t *testing.T) {
+	queue := parallelwork.NewQueue()
+
+	progressUpdates := make(chan struct {
+		enqueued, active, completed int64
+	}, 3)
+
+	queue.ProgressCallback = func(ctx context.Context, enqueued, active, completed int64) {
+		progressUpdates <- struct {
+			enqueued, active, completed int64
+		}{enqueued, active, completed}
+	}
+
+	queue.EnqueueBack(context.Background(), func() error {
+		time.Sleep(100 * time.Millisecond)
+		return nil
+	})
+	queue.EnqueueBack(context.Background(), func() error {
+		time.Sleep(100 * time.Millisecond)
+		return nil
+	})
+
+	err := queue.Process(context.Background(), 2) // Use two workers
+	require.NoError(t, err)
+
+	close(progressUpdates)
+
+	for update := range progressUpdates {
+		require.True(t, update.enqueued >= 0)
+		require.True(t, update.active >= 0)
+		require.True(t, update.completed >= 0)
+	}
+}
+
+func TestOnNthCompletion(t *testing.T) {
+	t.Run("callback is only called on n-th invocation", func(t *testing.T) {
+		var (
+			n               = 5                    // expect invocation on 5th attempt
+			errCalled       = errors.New("called") //nolint:goerr113
+			callbackInvoked int
+			callback        = func() error {
+				callbackInvoked++
+				return errCalled
+			}
+		)
+
+		onNthCompletion := parallelwork.OnNthCompletion(n, callback)
+
+		// before n-th invocation
+		for i := 0; i < n-1; i++ {
+			err := onNthCompletion()
+			require.NoError(t, err)
+			require.Equal(t, callbackInvoked, 0)
+		}
+
+		// on n-th invocation
+		err := onNthCompletion()
+		require.Error(t, err)
+		require.ErrorIs(t, err, errCalled)
+		require.Equal(t, callbackInvoked, 1)
+
+		// call once again (after n-th invocation)
+		err = onNthCompletion()
+		require.NoError(t, err)
+		require.Equal(t, callbackInvoked, 1)
+	})
+
+	t.Run("concurrency-safe", func(t *testing.T) {
+		var (
+			n               = 5                     // expect invocation on 5th attempt
+			results         = make(chan error, n+1) // we will have n+1, i.e. 6 attempts in total
+			errCalled       = errors.New("called")  //nolint:goerr113
+			callbackInvoked atomic.Int32
+			wg              sync.WaitGroup
+			callback        = func() error {
+				callbackInvoked.Add(1)
+				return errCalled
+			}
+		)
+
+		onNthCompletion := parallelwork.OnNthCompletion(n, callback)
+
+		wg.Add(n + 1)
+
+		for i := 0; i < n+1; i++ {
+			go func() {
+				results <- onNthCompletion()
+				wg.Done()
+			}()
+		}
+
+		wg.Wait()
+		close(results)
+
+		// callback must be called exactly 1 time
+		require.Equal(t, callbackInvoked.Load(), int32(1))
+
+		var cnt int
+		for result := range results {
+			cnt++
+			switch cnt {
+			// n-th invocation must run and return an expected error
+			case n:
+				require.Error(t, result)
+				require.ErrorIs(t, result, errCalled)
+			// other invocations must not run and return any error
+			default:
+				require.NoError(t, result)
+			}
+		}
+	})
+}