Public Holiday Pay Rates For Retail Employers In Australia

Public holidays can be a great revenue opportunity in retail - especially when customers are out and about, shopping for essentials, browsing sales, or making the most of a day off.

But for retail employers, public holidays also come with higher wage costs, stricter rostering rules, and a few compliance traps that can catch even experienced business owners.

If you’ve ever found yourself asking: “Do I have to pay extra on public holidays?”, “What if someone doesn’t work but they were rostered?”, or “Can I ask staff to work - and what do I pay them?” - you’re not alone.

In this guide, we’ll walk through the key things you need to know about public holiday pay rates for retail in Australia, how to identify the correct rate for your team, and what practical steps you can take to reduce disputes and stay compliant.

What Are Public Holiday Pay Rates In Retail (And Why Do They Matter)?

In simple terms, public holiday pay rates are the pay rates that apply when an employee works on a public holiday. For eligible employees, public holidays can also affect pay even where the employee doesn’t work (for example, because they are entitled to be absent on the public holiday and be paid for ordinary hours).

In retail, public holiday pay can get complicated because:

• Retail businesses often trade on public holidays (where permitted).
• Different employees may be covered by different instruments (Modern Awards, enterprise agreements, or annualised salary arrangements).
• Casuals, part-timers and full-timers can have different entitlements.
• Some Awards have specific rules about substituted days, or how penalties apply when a public holiday falls on a weekend.

For many retail employers, questions about public holiday rates in retail usually come down to two issues:

• What do I pay if they work? (Penalty rates or loaded rates may apply.)
• Do I pay if they don’t work? (Some employees are entitled to be paid their base rate for ordinary hours they would have worked.)

Getting this wrong can lead to underpayments (which can be costly to fix), employee disputes, and time-consuming back-and-forth with payroll.

Which Rules Apply To Your Retail Business?

To work out the right public holiday pay rates for retail staff, you need to identify the industrial instrument and employment setup that applies. In practice, most small retail businesses fall into one of these categories.

1. A Modern Award Covers The Employee

Many retail employees are covered by a Modern Award (for example, the General Retail Industry Award). Awards often set out:

• when public holiday penalty rates apply;
• minimum hourly rates and classifications;
• what happens if the employee does not work on a public holiday;
• any additional conditions (for example, minimum engagement periods).

If your employee is Award-covered, the Award is usually your starting point for public holiday pay calculations.

2. An Enterprise Agreement Applies

Some workplaces have an enterprise agreement (EA) that sets public holiday pay rules. These can be different to the Award - sometimes higher, sometimes structured differently - but must meet minimum legal standards overall (including the National Employment Standards).

If you’ve inherited a business, taken over a shop, or bought a retail business with staff, it’s worth checking whether an EA exists and whether it still applies.

3. You Pay An Annual Salary (With Award “Set-Off” Considerations)

Some retail employers pay a salary and intend for it to cover penalties and loadings. This can be workable, but it needs to be set up carefully.

If you’re paying an annual salary, it’s critical to ensure:

• the salary is high enough to keep the employee better off overall, including public holiday penalties where relevant;
• your contract clearly explains what the salary is intended to cover; and
• you still track hours and penalties so you can confirm there’s no underpayment over time.

Having the right Employment Contract in place is one of the simplest ways to reduce confusion around expectations, rates, and rostering.

How Do You Calculate Public Holiday Pay Rates For Retail Staff?

The exact calculation depends on the employee’s status (full-time, part-time, casual), their Award/agreement coverage, and whether they actually worked on the public holiday.

Rather than relying on “rules of thumb”, you’ll usually need to confirm the applicable rate and entitlement under the right instrument (and the National Employment Standards, where relevant).

That said, here are the most common scenarios retail employers deal with.

When A Full-Time Or Part-Time Employee Works On A Public Holiday

In many retail arrangements, working on a public holiday triggers a penalty rate (for example, a multiplier of their base rate). The relevant Award or enterprise agreement will specify:

• the public holiday penalty rate;
• whether the employee is also entitled to an alternative day off (depending on the rules);
• minimum shift length or other conditions that affect total pay.

If you’re trying to sanity-check your payroll approach, it can help to compare how you treat weekends and penalties more generally - for example, by aligning your approach to weekend pay rates and ensuring your payroll system properly handles penalties and loadings.

When A Full-Time Or Part-Time Employee Does Not Work On A Public Holiday

This is where many misunderstandings happen.

Full-time and part-time employees are generally entitled to be absent on a public holiday. If the public holiday falls on a day they would ordinarily work, they may also be entitled to be paid their base rate for those ordinary hours (subject to the usual rules and any applicable Award/agreement terms).

As a practical step, ask:

• Was the employee rostered or usually scheduled to work that day?
• Do they ordinarily work those hours (for example, every Monday)?
• Does the Award or agreement say they are entitled to payment for the public holiday?

For part-time employees, their entitlement is often tied closely to their ordinary hours. If you have part-timers with varying rosters, make sure you’re documenting their pattern of work and communicating roster changes clearly.

When A Casual Employee Works On A Public Holiday

Casual retail employees generally receive a casual loading (often 25%) instead of paid leave entitlements.

However, casual loading doesn’t automatically mean “no penalty rates ever”. In many cases, casual employees can still be entitled to public holiday penalty rates, with the casual loading either included in that rate or dealt with as set out in the relevant Award/agreement.

Also keep in mind that casual employees are generally not entitled to be paid for a public holiday they do not work (unless an Award, enterprise agreement or contract provides an additional entitlement).

Casual arrangements can be a compliance hotspot because public holidays are common trading days for retail, and casual rosters can change week to week. Clear documentation and correct payroll settings make a huge difference.

When A Public Holiday Is Substituted Or Falls On A Weekend

Public holidays can be “observed” or “substituted” (for example, where a public holiday falls on a weekend and the public holiday is observed on the Monday). In some situations, substitution can also occur by agreement - but only where this is permitted under the relevant Award/enterprise agreement and applicable state or territory rules.

This matters because:

• your staff might expect penalty rates on the “official” public holiday date;
• the legal public holiday might actually be on a different date;
• your trading day might not line up neatly with the public holiday entitlement.

When in doubt, confirm the public holiday date for your state/territory and then check how the relevant Award/agreement treats substituted days.

Rostering, Refusals, And “Reasonable Requests” On Public Holidays

Retail is often busiest when everyone else is off work - which means you may need staff on public holidays to keep your doors open.

But employees may have rights to refuse to work on a public holiday in some circumstances. Whether a request is reasonable (and whether a refusal is reasonable) can depend on factors like the employee’s personal circumstances, the nature of your business, staffing levels, and how much notice you gave.

From a small business owner’s perspective, the best approach is to reduce surprises:

• Plan public holiday trading dates early (especially around Christmas/New Year, Easter, and long weekends).
• Give as much notice as possible for rosters and shift changes.
• Put your expectations in writing, including how you handle availability and public holiday staffing.

If you want a practical compliance baseline, it’s worth checking your systems against the legal requirements for employee rostering, because rostering issues often sit at the heart of public holiday disputes.

Do You Need A Workplace Policy For Public Holidays?

A clear policy won’t override an Award, enterprise agreement, or the Fair Work Act, but it can help everyone understand how your business operates on public holidays.

For example, a policy might cover:

• how you ask for availability;
• how you allocate shifts (including fairness and rotation);
• timeframes for roster publication;
• the process for requesting not to work on a public holiday;
• how you handle last-minute changes and emergencies.

This can sit inside your broader Workplace Policy documents, so expectations are consistent across your team (and not handled differently manager-to-manager).

Common Payroll Mistakes Retail Employers Make On Public Holidays

Even well-run retail businesses can slip up on public holiday pay - especially when you’re juggling staffing shortages, peak-season demand, and customer expectations.

Here are some of the most common mistakes we see.

1. Paying The Wrong Classification Rate

Public holiday penalties usually apply to an employee’s base rate. If an employee is classified incorrectly under the Award (for example, as a junior, Level 1, or Level 2 when they shouldn’t be), the penalty rate calculation will also be wrong.

This can create underpayments that add up quickly over multiple public holidays.

2. Treating Salaried Employees As If Penalty Rates Don’t Apply

Some employers assume that if someone is on a salary, public holiday penalties simply don’t matter.

In many workplaces, you still need to ensure the salary adequately compensates the employee compared to what they would have earned under the Award (including public holiday pay rates where relevant).

3. Confusion Between Public Holiday Pay And Other Entitlements

Public holidays interact with other entitlements in ways that can confuse both employers and staff - particularly around annual leave and leave loading.

For instance, if an employee takes annual leave during a period that includes a public holiday, the public holiday may not be counted as annual leave (depending on the scenario), which affects the leave balance and pay processing.

Keeping your leave rules and payroll systems aligned with your broader approach to annual leave payments can help prevent payroll errors when public holidays fall inside peak leave periods.

4. Not Documenting Agreements About Substitution Or Alternative Days

If your business substitutes public holidays or offers alternative days off, you need to document it properly and ensure the arrangement is permitted under the applicable Award/enterprise agreement and state/territory rules. Informal agreements (for example, “We’ll just swap it to Tuesday”) can lead to disputes later if expectations don’t match what the rules allow.

5. Relying On Memory Instead Of A Consistent Process

Public holidays happen every year - but the details change (dates change, staff change, rosters change, Awards update).

A repeatable process is usually safer than relying on what you did “last year”. Many small businesses create a simple checklist for each public holiday period:

• confirm the public holiday dates for your state/territory;
• confirm who is working and who is not;
• confirm the correct rates under the applicable Award/agreement;
• confirm the payroll codes/settings in your system;
• keep records of rosters and agreements.

If you want a quick sense-check for budgeting and payroll planning, tools like a public holiday pay calculator can be a helpful starting point - but make sure you still verify the Award/agreement rules that apply to your business.

Key Takeaways

• Public holiday pay rates in retail depend on what applies to the employee (usually a Modern Award or enterprise agreement) and the employee’s status (full-time, part-time, casual).
• Public holiday pay in retail isn’t only about penalties for working - full-time and part-time employees may also be entitled to be paid when they don’t work, depending on their ordinary hours and the relevant rules. Casuals are generally only paid for public holidays if they work.
• Rostering and notice are key risk areas, especially for casuals and during peak periods like Christmas and Easter.
• Salary arrangements can still require careful checking to ensure employees aren’t underpaid compared to Award entitlements, including public holiday penalties.
• Clear documentation reduces disputes - the right contracts and policies can help set expectations about working public holidays and how rates are applied.

Note: This article is general information only and doesn’t constitute legal advice. Awards, enterprise agreements and state/territory public holiday rules can be complex, and the right outcome depends on your specific circumstances.

If you’d like help reviewing your retail pay setup, contracts, or policies so you can manage public holiday pay rates with confidence, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.