Public Holiday Pay

Public Holidays as a Workplace Entitlement

Public holidays in Australia are a fundamental workplace entitlement governed by the National Employment Standards (NES). Employers have specific obligations depending on whether an employee works the public holiday or takes it off. Getting this wrong can lead to significant underpayment claims, back-pay orders, and penalties from the Fair Work Ombudsman.

This guide explains the different pay scenarios, how to calculate penalty rates under various awards, and state-specific rules you must know.

Who Is Entitled to Public Holiday Pay?

Eligibility for public holiday pay depends on an employee’s status and their ordinary hours of work.

Important Note: An employee must have “reasonably expected to work” on the day the public holiday falls. For example, a part-time employee who does not usually work on Mondays is not entitled to be paid for a Monday public holiday if they do not work.

Pay When Employees Do NOT Work the Public Holiday

If a full-time or part-time employee is absent on a public holiday, and it falls on a day they would ordinarily work, they must be paid their base pay rate for the ordinary hours they would have worked.

How to Calculate “Base Rate” for the Day Off

The formula is based on the employee’s ordinary hours:

Payment for day off = Ordinary hours scheduled for that day × Base hourly rate

Example:
Sarah, a full-time retail worker under the General Retail Industry Award, is rostered to work 7.6 hours each Monday. Her base hourly rate is $25.00.

Public holiday payment (day off) = 7.6 hours × $25.00 = $190.00

Casual employees do not receive payment for a public holiday they do not work.

Pay When Employees DO Work the Public Holiday

If an employee works on a public holiday, they are generally entitled to penalty rates (extra pay). The rate is not standard across all industries; it is determined by the applicable Modern Award, Enterprise Agreement, or the employee’s contract.

Common Public Holiday Penalty Rates

Rates can vary, but common multipliers include:

Calculation Example:
James, a casual waiter (Hospitality Award), works 5 hours on Christmas Day. His base casual rate is $30.00/hour.

Public holiday pay = 5 hours × ($30.00 × 2.5) = 5 × $75.00 = $375.00

Always check the specific Award or Agreement, as some have complex rules (e.g., different rates for the first X hours vs. subsequent hours).

Substitute Public Holidays

A “substitute” public holiday occurs when a public holiday falls on a weekend, and an alternative weekday is designated as the holiday.

Key Rules:

• The substituted day is treated as the public holiday for pay and entitlements.
• Employees are entitled to the public holiday on the substituted day, not the original weekend date.
• Employers must inform employees of any business-level agreements for substitute days.

State-Specific Public Holidays

In addition to national holidays, each state and territory has its own public holidays. Employers must pay employees according to the rules of the state or territory where the employee is based for work.

Crucial: An employee in Victoria must be paid for Melbourne Cup Day according to Victorian rules, even if their company’s head office is in another state.

Refusing to Work on a Public Holiday

Employees have a legal right to reasonably refuse to work on a public holiday.

What is a “Reasonable Refusal”?

Fair Work considers several factors, including:

• The employee’s personal circumstances (e.g., family responsibilities).
• The amount of notice given by the employer.
• The operational requirements of the business.
• Whether the employee could be expected to work on the public holiday (e.g., is it in their contract?).

Employer Action: If an employee’s refusal is deemed reasonable, you cannot dismiss them or take adverse action. Always discuss requests and document the process.

Key Takeaways & How to Ensure Compliance

• Eligibility is Key: Only full-time and part-time employees get a paid day off. All employees (including casuals) get penalty rates for hours worked.
• Check the Correct Instrument: Penalty rates are set by Awards, Agreements, or contracts—not a single national rate.
• Apply State-Specific Rules: Pay employees based on the public holidays in their work state/territory.
• Understand Reasonable Refusal: Employees can say no, and you must assess each request fairly.
• Document Rosters and Agreements: Clear records are your best defense in a dispute.

Automate Public Holiday Compliance with Workstem

Manually calculating public holiday pay across different awards, employment types, and states is complex and error-prone. Workstem’s payroll and workforce management software automates this for you:

• Award Interpretation: Automatically applies the correct public holiday penalty rates from over 150 Modern Awards.
• State-Based Rules: System updates with all state and territory public holiday calendars.
•  Accurate Calculations: Precisely calculates pay for employees who work or take the day off.
•  Roster Compliance: Flags potential issues with public holiday staffing and refusals.

Public Holiday Pay in Australia: FAQ for Employers & Employees

Q1: Is public holiday pay the same across all Australian awards and agreements?

A: No, public holiday penalty rates vary significantly between different Modern Awards and Enterprise Agreements. For example:

• Hospitality Award: Typically 250% of the base rate
• Retail Award: Usually 225% or 250% depending on the time worked
• Manufacturing Award: Generally 250%
• Some Enterprise Agreements: May offer different rates or conditions

Always check the specific award or agreement that covers your workplace. Using an incorrect rate is a common cause of underpayment.

Q2: How do I calculate public holiday pay for part-time employees who normally don’t work that day?

A: If a public holiday falls on a day when a part-time employee doesn’t ordinarily work, they:

• Do not get paid for the day off
• Do get penalty rates if they agree to work that day

Example: A part-timer who only works Tuesday-Thursday would not be paid for a Monday public holiday unless they work it.

Q3: Can casual employees receive “paid” public holidays?

A: Casual employees don’t receive paid leave entitlements, so they don’t get paid for public holidays they don’t work. However, if they work on a public holiday, they receive penalty rates on top of their casual loading.

Important: The penalty rate applies to the base rate, not the casual rate.
Calculation: Base rate × casual loading (usually 25%) × public holiday penalty rate.

Q4: What happens when a public holiday falls during an employee’s annual leave?

A: The public holiday is not counted as annual leave. The employee should either:

• Be paid for the public holiday (if they normally work that day)
• Have an extra day added to their annual leave balance
• Receive an alternative day off

Q5: Are employees entitled to public holidays during their probation period?

A: Yes, probation status doesn’t affect public holiday entitlements. Employees are entitled from their first day of employment if they meet other eligibility criteria (e.g., being a permanent employee scheduled to work that day).

Q6: How much notice must an employer give to request work on a public holiday?

A: There’s no fixed national timeframe, but “reasonable notice” is required. Factors considered:

• Industry norms (e.g., retail/hospitality often require advance notice due to trading hours)
• The employee’s personal circumstances
• Urgency of business needs
• What’s written in employment contracts or awards

Best practice: Provide at least 4 weeks’ notice where possible and document all requests.

Q7: Can an employer force employees to take annual leave on a public holiday?

A: No, employers generally cannot require employees to take annual leave on a public holiday. The public holiday should be treated separately from annual leave entitlements.

Q8: What if a public holiday falls on a weekend and the business is closed?

A: If the business is normally closed on weekends, and a public holiday falls on a Saturday/Sunday:

• Permanent employees who don’t normally work weekends don’t get paid for that day
• No substitute day is automatically created unless one is declared by the state/territory government

Q9: Are apprentices entitled to public holiday penalty rates?

A: Yes, apprentices receive public holiday penalty rates based on their percentage of the full trade rate. Check the specific award for exact calculations, as some have special apprentice provisions.

Q10: How are public holidays treated for shift workers?

A: For shift workers, if a public holiday falls on a rostered day off, they generally don’t get paid. If they work on the public holiday, they receive penalty rates. Some awards provide additional entitlements for shift workers on public holidays.

Book a free demo with our payroll experts and experience how Workstem can streamline your payroll and workforce operations.

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