In Australia, employees get seven national public holidays on top of territory-specific holidays. This means they may take those days off without any pay cuts. However, what if you need staff to come in to help you handle the public holiday crowds?
For certain industries, additional staff can be used to maximise public holidays. With good reason, you may ask employees to come in, but youโll need to pay them based on the public holiday penalty rate.
Below, we go over the typical employee entitlements and how they may affect your payroll compliance. Use the information before planning your staff roster or hiring more employees over the holiday season.
Understanding public holiday wages
Holiday wages are governed by various laws and employment standards, such as the National Employment Standards (NES) and Enterprise Agreements. The public holiday wage also depends on the relevant Modern Award or Territory Award.
Alternatively, full-time and part-time employees who come in for public holidays can agree to get a day (or equivalent time) off on a different day or additional annual leave equivalent to the time worked. If they choose the former, the day off must be taken within 4 weeks of the public holiday. If not, they should be paid based on the penalty rate instead.
Remember, employees can decline work on public holidays, especially within reasonable grounds. If the public holiday falls on a day they usually work, theyโre entitled to their base pay.
To avoid being short on staff for the holidays, carefully consider the roles you need to fill, calculate the relevant penalty rates, and provide staff with enough notice.
How to calculate public holiday penalty rates
Penalty rates can depend on the relevant Modern Award or your agreement with the employee. For work done on public holidays, penalty rates typically fall under the following types:
- Double-time pay: The employee is paid twice their normal hourly rate.
- Double-time-and-a-quarter pay: The employee is paid 2.25 times their normal rate,
- Double-time-and-a-half pay: The employee is paid 2.5 times their normal hourly rate.
- Casual employee penalty pay: This widely varies depending on the relevant Modern Award, but is usually 25-50% more than the penalty pay for part-time and full-time employees.
For example, Danielle is a full-time retail employee paid $27.17 per hour. The General Retail Industry Award states that full-time employees get 225% of their normal hourly rate on public holidays. If she were to work on Good Friday, she would receive $61.13 per hour.
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Public holiday penalty rates per industry or Modern Award
| Industry/Award | Full-time or part-time employees | Casual employees |
|---|---|---|
| Real Estate | | |
| Horticulture | | |
| Fast Food/Takeaway | | |
| Hospitality | ||
| Restaurant/Cafe | ||
| Retail | ||
| Children's Services | | |
| Clerks (Private Sector) | ||
| Hair & Beauty | ||
| Manufacturing | ||
| Social, Community, Home Care & Disability | ||
| Vehicle Sales & Repair | ||
| Building & Construction | | |
| Health Professionals & Support Services | ||
| Security Services | ||
| Storage & Wholesale | ||
| Cleaning | | |
| Road Transport & Distribution | | |
Other public holiday entitlements you should know about
Like penalty pay rates, the following entitlements can vary between states and territories. Learn them to anticipate the impact on your small business payroll.
Right to be absent from work
Generally, employees have the right to be absent from work on a public holiday without losing pay or annual leave. There are exceptions, such as when an employee is required to work on a public holiday due to the nature of their job or because they have agreed to do so.
Extra annual leave
In some Australian states and industries, employees may get an additional annual leave if they work on a public holiday. This is called lieu day leave. You wonโt need to pay the rate for holiday pay if an employee takes this entitlement.
Minimum shift length
Some awards mandate that employees working on a public holiday be paid for a minimum number of hours, even if their actual working hours are shorter.
Substitute public holiday for another day
An employee may substitute a public holiday for another day. This is typically done if the public holiday falls on an employee’s day off or is inconvenient for the business.
Handling payroll for hours worked on public holidays
Running payroll for employees who fall under the penalty rate can be daunting, especially on top of high demands during public holidays. Leveraging flexible payroll software like Payroller can help simplify the process. With Payroller, youโll spend less time ensuring accurate calculations and adding leaves or entitlements to match your business needs.
Beyond paying your employees, you can effectively manage shift assignments and employee communications from Payrollerโs platform. Our timesheet and online rostering capabilities will let you set shifts and send them to employees directly for them to accept and decline. This makes it easier to plan for the holidays and comply with Australian labour laws.
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