If you employ staff in Australia, public holidays come with specific pay and rostering rules you need to get right. Questions like “Do I have to pay if they don’t work?”, “What if a part‑timer’s public holiday falls on their usual day?” and “How much do I pay if someone works?” pop up every year - especially around Christmas, New Year’s Day and Easter.
The good news: once you understand the framework under Australia’s National Employment Standards (NES) and any applicable Modern Award or Enterprise Agreement, paying employees on public holidays is straightforward. This guide steps through the entitlements for full‑time, part‑time and casual employees, what to pay if someone works, the “reasonable request/refusal” test, and the practical policies that keep you compliant.
How Public Holiday Entitlements Work In Australia
Public holidays are days declared under Commonwealth, state or territory law (including substituted or additional holidays). They’re not automatically “non‑working days” - rather, employees covered by the NES are entitled to be absent from work on a public holiday and, in many cases, be paid.
Key concepts to keep in mind:
- Entitlement to be absent: Employees can be absent on a public holiday. You may request they work, but that request - and any refusal - must pass a reasonableness test (more on this below).
- Base rate of pay: Where the NES provides paid absence on a public holiday, payment is at the employee’s base rate for their ordinary hours that would have been worked that day. This excludes loadings, penalties, overtime, bonuses and allowances.
- Industrial instruments still apply: Modern Awards and Enterprise Agreements overlay entitlements (for example, higher rates when working on a public holiday). They can go above the NES but not below it.
- Jurisdictional differences: Each state and territory publishes its public holiday calendar (with occasional ad hoc days). If you operate across locations, roster and pay according to the holiday applicable to the work location.
If you’re unsure which instrument applies to your team or how to interpret it, getting Award Compliance advice early can save headaches later.
Public Holiday Pay: When Staff Don’t Work vs When They Do
Your obligations differ depending on whether the employee is rostered to work the day a holiday falls and whether they actually work. Here’s how it breaks down by employment type.
Full‑Time Employees
- Not working the public holiday: If the holiday falls on a day they would ordinarily work, they’re entitled to be absent and be paid their base rate for their ordinary hours for that day.
- Working the public holiday: If they work, pay the public holiday penalty rates required by the applicable Award or Agreement (often at least double time, sometimes more). Some instruments also allow an agreed time off in lieu arrangement.
Part‑Time Employees
- Not working the public holiday: If the holiday falls on their usual workday, they’re paid their base rate for their ordinary hours that would have been worked. If the holiday falls on a day they don’t usually work, there’s no paid entitlement for that day.
- Working the public holiday: Pay Award/Agreement penalty rates for the hours actually worked.
Casual Employees
- Not working the public holiday: Casuals generally aren’t paid if they don’t work, as they don’t have guaranteed ordinary hours. Check the relevant Award or Agreement for any exceptions.
- Working the public holiday: Pay the casual hourly rate (which includes the casual loading) plus any public holiday penalty rate under the applicable instrument. The combined rate can be significant, so confirm the exact multiplier before rostering.
Substituted And Additional Holidays
If a public holiday is “observed” on another day (for example, when Christmas Day falls on a weekend and an additional weekday is declared), entitlements follow the declared holidays for the relevant jurisdiction. Always confirm the dates each year for your state or territory and adjust rosters and pay settings accordingly.
Time Off In Lieu (TOIL)
Some Awards/Agreements permit TOIL instead of public holiday penalty rates, but there are strict rules about written agreement, accrual and when TOIL must be taken or paid out. If you offer TOIL, ensure your approach aligns with your instrument’s requirements and the NES. For general principles around TOIL, see how time off in lieu arrangements work in Australia.
Requesting Employees To Work On Public Holidays: What’s “Reasonable”?
Under the NES, you may request an employee to work on a public holiday. An employee may refuse if either:
- your request is not reasonable; or
- their refusal is reasonable.
These are separate tests. That means even if your request is reasonable, an employee can still lawfully refuse if their refusal is reasonable in the circumstances.
When deciding what’s reasonable, consider factors such as:
- the nature of your workplace (e.g. essential services, hospitality, retail) and operational requirements on that day
- the employee’s personal circumstances (including family responsibilities or religious observance)
- whether the employee is full‑time, part‑time or casual
- whether the employee could reasonably expect to be asked (for example, past practice or roster patterns)
- the amount of notice you gave and what the employee gave you
- any additional compensation (like public holiday penalty rates) they’re entitled to
Practically, this means you should plan public holiday staffing early, communicate clearly, and genuinely consider any refusals on their merits. A well‑drafted Workplace Policy that outlines how you manage public holiday rosters and requests helps set expectations and demonstrates a fair process.
Managing Public Holidays In Practice (Rosters, Leave And Records)
Getting the legal rules right is step one. Step two is running a smooth payroll and roster process - especially if you trade on holidays.
Rostering And Communication
- Publish public holiday rosters well in advance and invite early feedback on any personal or family commitments.
- Be transparent about applicable penalty rates or TOIL options so staff understand how they’ll be compensated.
- Where you need coverage, prioritise volunteers first, then make reasonable requests and assess refusals fairly.
Record‑Keeping And Payroll
- Record the hours worked on public holidays separately in your payroll system to ensure the correct multipliers apply.
- Keep written agreements for any TOIL arrangements and track balances carefully.
- Retain rosters, requests and responses - solid records can be critical if a dispute arises or you face an audit.
Public Holidays During Leave
- Annual leave: If a public holiday falls during a period of annual leave, it is not deducted from the employee’s annual leave balance. That day is treated as a paid public holiday instead.
- Personal/carer’s leave: Similarly, a public holiday falling in a period of paid personal/carer’s leave is not counted as personal leave.
- Unpaid leave or not ordinary hours: There’s no entitlement to paid public holiday absence if the day is not part of the employee’s ordinary hours (for example, during a period of unpaid leave).
Shutdowns And Closures
If your business is closed on a public holiday, employees who would ordinarily have worked that day remain entitled to be paid their base rate for their ordinary hours. This is separate from any broader annual shutdown provisions under Awards/Agreements.
Industry Variations
Penalty rates and rostering rules can vary significantly across Awards, especially in hospitality, retail, health and community services. Confirm the correct public holiday rates and conditions for your team before you finalise rosters. If you need a sanity check, speak with an employment law expert about your specific instrument and practices.
Essential Documents To Keep You Compliant
Clear, tailored documents make public holiday compliance easier and reduce the risk of disputes.
- Employment Contract: Set expectations around rosters, ordinary hours, public holiday work, penalty rates/TOIL and how changes to hours are agreed. Align the contract with the applicable Award/Agreement and the NES.
- Workplace Policy: Document your rostering process, how you handle public holiday requests/refusals, time recording, and how TOIL is requested, approved and taken.
- Staff Handbook: Bring key policies together (including leave, rostering and conduct) so employees always know where to find the rules.
- Award Compliance framework: Map the correct classifications, base rates, public holiday penalties and allowances to your payroll system and keep that mapping current.
- Payroll and time records: Accurate start/finish times, breaks and public holiday hours are essential to calculate the right penalty rates and demonstrate compliance.
- TOIL agreements: If your Award/Agreement allows TOIL, keep written confirmation of each TOIL arrangement and track accruals, usage and any required payout timeframes.
Well‑drafted documents also help with onboarding: new starters learn quickly how your business handles public holidays and what they can expect.
Key Takeaways
- Full‑time and part‑time employees are paid their base rate for ordinary hours if a public holiday falls on a day they would ordinarily work, even if they don’t work that day.
- When staff work on a public holiday, pay the public holiday penalty rates under the relevant Award or Agreement; some instruments also allow properly agreed TOIL.
- Casual employees are generally paid only if they work on the holiday (casual loading plus any applicable public holiday penalty rate under the instrument).
- Both the employer’s request to work and the employee’s refusal must be considered against the “reasonable” test - a refusal can be reasonable even if the request is reasonable.
- Plan rosters early, communicate clearly, and keep strong records of hours, rosters and any TOIL to stay compliant and prevent disputes.
- Lock in the basics with an Employment Contract, a clear Workplace Policy, and an up‑to‑date Award Compliance setup so payroll gets the right result every time.
If you’d like help reviewing your public holiday obligations, drafting contracts and policies, or configuring Award settings, contact Sprintlaw on 1800 730 617 or team@sprintlaw.com.au for a free, no‑obligations chat with our employment law experts.
