Overtime on Public Holidays in Australia: What Employers Need to Know

Public holidays can be great for sales and customer goodwill, but they also raise tricky payroll and rostering questions for employers. If your team works on a public holiday, when does that time count as overtime? What rates apply? Can you offer time off in lieu instead? And how do you stay compliant with the Fair Work system while keeping your roster fair and sustainable?

In this guide, we’ll unpack how overtime on public holidays works in Australia from an employer’s perspective, and outline practical steps to manage pay, rosters and records with confidence.

What Counts As Overtime On A Public Holiday?

Start with the basics: “overtime” is generally time worked beyond an employee’s ordinary hours. The exact definition depends on the worker’s industrial instrument - usually a modern award or enterprise agreement - and their Employment Contract.

On a public holiday, two concepts often overlap but are different:

• Public holiday penalty rates: A higher rate for ordinary hours worked on a public holiday (e.g. 2x base rate). This is not overtime by itself.
• Overtime: Time worked outside ordinary hours, which may attract overtime rates. If overtime is worked on a public holiday, an award may specify special (often higher) overtime rates for those hours.

Whether hours on the day are “ordinary” or “overtime” depends on the applicable award or agreement, the employee’s classification, and how you’ve set ordinary hours in the contract or roster. For some rostered roles (retail, hospitality, healthcare), ordinary hours can fall on public holidays. For others, any work on public holidays may be overtime.

Casuals normally receive a casual loading on top of penalty or overtime rates as set by the award. Part-time and full-time staff may have minimum engagement periods and specific span-of-hours rules that affect when overtime kicks in.

Because rates and triggers can vary, it’s smart to cross-check the rules on penalty rates and how your award defines overtime rates before each public holiday period.

Can You Require Staff To Work On A Public Holiday?

As a general rule, you can make a request that an employee work on a public holiday, and an employee can refuse if the request (or refusal) is unreasonable. Reasonableness looks at factors like the nature of the work, operational needs, the employee’s role and seniority, notice given, and the employee’s personal circumstances.

In practice, consult early and roster transparently. Give as much notice as you can, explain operational needs, and consider a fair rotation. If the award requires agreement to work on public holidays, make sure you obtain it in writing.

It also helps to have a clear roster process that aligns with your award and any enterprise agreement. Review your obligations around rostering requirements before the busy holiday period and ensure managers apply them consistently.

How Do You Calculate Pay For Public Holiday Overtime?

Here’s a practical framework:

1. Confirm the instrument and classification: Identify which modern award (and level) or enterprise agreement covers the role. Check the employee’s status (full-time, part-time, casual) and record of ordinary hours.
2. Separate ordinary vs overtime hours: Determine which public holiday hours are ordinary hours (attracting penalty rates) and which exceed ordinary hours (attracting overtime rates). Many awards specify different multipliers when overtime occurs on a public holiday.
3. Apply the right multipliers: Calculate the base hourly rate, then apply the relevant penalty and overtime multipliers as required by the instrument. Some instruments specify whether penalties and overtime compound or if the highest applicable rate applies.
4. Minimum engagements and breaks: Observe minimum shift lengths and any required breaks. If you alter start/finish times to meet operational demand, ensure you still meet those conditions.
5. Document and double-check: Keep clear records of the classification, rostered ordinary hours, and actual hours worked. This supports correct pay and helps resolve queries quickly.

If you’re unsure which rate applies in a specific scenario, run a quick check using the Fair Work Pay Calculator and confirm against your award.

Don’t forget superannuation. Super is payable on Ordinary Time Earnings (OTE). Generally, overtime is excluded from OTE, but hours worked on a public holiday may still be ordinary hours (and therefore OTE) if they fall within the employee’s ordinary hours for that period. If they’re genuinely overtime, they’re typically excluded. For a refresher on what counts as OTE in Australia, see Ordinary Time Earnings.

Time Off In Lieu (TOIL) Instead Of Overtime On Public Holidays

If your award or agreement allows it, you may offer time off in lieu of overtime (TOIL). TOIL can be a useful way to balance business needs and employee wellbeing during peak seasons.

Key points to get right:

• Written agreement: Many awards require a written TOIL agreement with specific information (e.g. when TOIL was earned, at what rate it accrues, and when it must be taken or paid out).
• Accrual rate: Some instruments require TOIL to accrue at the overtime rate (e.g. 1.5x or 2x), not hour-for-hour. Always follow the wording in your award or enterprise agreement.
• Expiry or payout: If TOIL isn’t taken within the required timeframe, it may need to be paid out at the applicable overtime rate.
• Record-keeping: Maintain accurate records and make sure your payroll system can track TOIL accruals and redemptions.

To understand the rules and best practices around TOIL, review time off in lieu and update your policies so managers apply it consistently.

Public Holiday Rostering, Breaks And Fatigue Management

Public holidays often mean extended trading hours or higher demand. To stay compliant and reduce fatigue risks:

• Plan ahead: Publish holiday rosters early, and keep communication open about who is available and who has caring or religious commitments.
• Minimum breaks between shifts: Check the award for required rest periods. As a reference point, review the general rules on the minimum break between shifts for your industry.
• Meal and rest breaks: Busy public holiday shifts still need legally compliant breaks. Ensure managers understand workplace break laws so staff get the right rest at the right time.
• Safe staffing levels: Build in buffer coverage so you’re not routinely pushing into overtime due to understaffing.
• Transparency on penalties/overtime: Where possible, display or communicate the relevant penalty and overtime settings for the role so there are no surprises on payslips.

Contracts, Policies And Records To Get Right

Getting the paperwork right up front makes public holiday compliance much smoother. Consider locking in the following:

• Employment Contract: Ensure each employee has a clear, up-to-date Employment Contract that aligns with the applicable award or agreement and sets ordinary hours, roster flexibility and overtime approval processes.
• Casual Employment Contract: For casual staff, include details about loading, minimum engagements, and how you’ll handle public holiday shifts, using a tailored Employment Contract (Casual).
• Workplace Policies: A Staff Handbook (or equivalent) clarifies rostering, public holiday work, breaks and TOIL. If you don’t have one, consider a Staff Handbook Package so managers apply rules consistently.
• Award Coverage And Classification: Confirm classifications and entitlements under Modern Awards, and keep role descriptions current to reduce misclassification risk.
• Payroll And Timekeeping: Use reliable systems to capture actual hours, breaks, public holiday tags, and overtime triggers. Keep these records for the legally required period.

Good documentation reduces disputes, helps new managers follow the rules, and provides an audit trail if Fair Work Compliance ever comes knocking.

Common Scenarios Employers Ask About

1) Part-Time Employee Rostered On A Public Holiday

If a part-time employee’s ordinary hours fall on the public holiday, they’re usually entitled to public holiday penalty rates for those hours. If they work beyond their ordinary hours, overtime may apply according to the award rules.

2) Casual Employee Called In At Short Notice

Check minimum engagements, casual loading and the public holiday penalty provisions for casuals. If the hours exceed ordinary limits (where applicable), overtime rates for a public holiday may apply in addition to casual loading if the award specifies compounding, or the highest applicable rate if it does not. Always follow the award’s wording.

3) Employee Declines Public Holiday Work

Requests to work must be reasonable, and employees can refuse unreasonably. Consult early, consider personal circumstances, and document the conversation. If you can, rotate opportunities to distribute public holiday work more fairly.

4) Substitute Or Additional Public Holidays

Some jurisdictions move public holidays when they fall on weekends, and some awards/agreements allow substitution. If a day is substituted, apply the penalty/overtime rules to the observed day that legally counts as the public holiday.

5) Public Holiday During Paid Leave

Under the National Employment Standards, if a public holiday falls during a period of paid annual leave, the day is not taken out of the employee’s annual leave balance. This typically doesn’t raise overtime issues unless they return and work beyond ordinary hours that same period - check award rules for that week’s span of hours.

6) Contractors Working On Public Holidays

Independent contractors are usually paid per agreement and aren’t covered by award penalty or overtime provisions. However, ensure the contractor is genuinely a contractor (not an employee) and that your contract clearly covers public holiday rates or surcharges if relevant.

How To Reduce Disputes And Payroll Errors

Public holiday pay mistakes often come from assumptions. A few simple habits help avoid headaches:

• Confirm the instrument: Before you roster, check the correct award/EA and classification for each role.
• Lock in ordinary hours: Set clear ordinary hours in contracts and rosters - this makes it easier to separate penalty-rate hours from overtime.
• Use checklists: Create a public holiday payroll checklist so managers always verify penalty and overtime rules.
• Keep conversations in writing: If you’re asking someone to work a public holiday, confirm details by email or via your HRIS so there’s a record of the request or any agreed TOIL.
• Spot-check payslips: After the holiday, review a sample of payslips to ensure the right rates and labels were applied.

If your setup or growth plans make the rules more complex (multiple sites, different awards, varied shift patterns), it’s worth tightening contracts and policies now so you’re not scrambling on the eve of a public holiday.

Key Takeaways

• On a public holiday, ordinary hours attract public holiday penalty rates, while hours beyond ordinary hours may attract overtime - check your award or agreement for the exact rules.
• Employers can request public holiday work, but the request (and any refusal) must be reasonable; plan rosters early and keep communication open.
• Calculate pay by separating ordinary and overtime hours, then applying the correct multipliers; use the Fair Work Pay Calculator as a cross-check and confirm how super applies to OTE.
• If your instrument allows it, time off in lieu can be offered for public holiday overtime, but you’ll need a compliant written agreement and solid record-keeping.
• Strong foundations - a clear Employment Contract, aligned policies, correct award classifications, and reliable timekeeping - reduce disputes and payroll errors.
• Proactive rostering, minimum breaks, and fatigue management are essential to keeping holiday trading lawful and sustainable.

If you’d like a consultation on handling overtime on public holidays for your team, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.