Public holiday pay rates: how to calculate it?

As an employer it’s crucial you understand, and correctly apply, all manner of pay responsibilities to your staff. Underpaying your staff or neglecting the regulations around minimum wage, hourly rates, and holiday pay rates, is simply not an option.

But never fear! We are here to set the record straight on holiday pay rates and how they need to be applied, as per the rules laid out by the Fair Work Ombudsman. Public holiday rates or penalty rates are particularly pertinent to those who employ casual staff.

Let’s jump into the particulars.

Public holidays in Australia

Before we explore staffing, pay, and other entitlements and rules around public holidays in Australia, let’s look at public holidays in Australia.

Public holidays can dictate opening restrictions or business closures around the country. Some are enforced while others are optional.

While we have national public holidays, we also have state and territory based public holidays which need to be observed.

State and territory based public holidays, as well as national public holidays, will shift depending on the year, so make sure you’re looking at the correct information for exact dates of the public holiday.

For example, even if 25 December is Christmas Day, if it falls on a weekend, a weekday may become nominated as a public holiday.

Public holidays are as follows for different states and territories:

Public holiday entitlements – Fair Work Ombudsman

What does the Fair Work Ombudsman have to say about public holidays, employees, and businesses?

The Fair Work Ombudsman dictates that industry awards, enterprise agreements and various other forms of employee agreements may include staff entitlements for working on a public holiday. These can include:

• extra pay
• a day off or extra annual leave
• minimum requirements on shift lengths
• substitution of a public holiday for another day.

Public holiday pay rates

Public holiday pay rates, also known as penalty rates, generally apply to many awards and employees who you recruit to work these days.

While the exact rate of pay is dependent on your employee’s specific award and employment type, you’ll find that most employees, particularly casual staff, will be paid 250% of their ordinary minimum pay rate.

How to calculate public holiday pay rates

The best way to ensure you’re aware of the specifics around your employees and your industry is to consult directly with the Fair Work Ombudsman, who controls these rates and rules.

You can find up-to-date information, tools, and award-specific penalty rate calculators on the Fair Work Ombudsman’s website.

Work on a public holiday

Working on a public holiday is not enforceable. You must come to a reasonable agreement with your employees if you want them to work on a public holiday.

This means that as an employer, you should request that the employee work on these designated days, come to an agreement, provide them with minimum shift hours and applicable penalty rates.

You should take into consideration,

• carer responsibilities
• personal circumstances or plans
• notice provided
• nature of the workplace and role
• whether they’re full time, part time, or casual.

If you have casual staff who would like to work on public holidays, consider minimum work shifts as set out by the Ombudsman and their award.

Not working on public holidays

When you have full or part time staff, you still need to pay your employees that which they would have received if they had worked that day.

For full or part time staff, this means paying them their base rate of pay.

For example, if your full-time staff member would normally work Tuesday, but it’s Christmas Day, you still pay them as if they worked as per normal.

If you have a part time staff member it will depend on their normal roster. For example, if you have an employee who normally works Tuesday to Thursday, and a public holiday falls on Tuesday, you must pay them as if they worked that day. If, however, public holidays fall on a Friday, and they would not normally be working that day, you do not have to pay them.

You do not need to pay casual employees on a public holiday they didn’t work.