Public Holiday Pay Rates In NSW Explained

Public holidays are great for your customers, but they can create payroll headaches if you’re not prepared.

If you’re running a business in New South Wales, your obligations on a public holiday are set by national workplace laws and, in most cases, modern awards or enterprise agreements. Getting public holiday pay rates wrong can lead to underpayments, penalties, and unhappy staff - none of which you want.

In this guide, we’ll walk you through how public holiday pay rates work in NSW, what you need to pay permanent and casual employees, when penalty rates apply, and the simple steps you can take to stay compliant and confident on every public holiday.

What Counts As A Public Holiday In NSW?

NSW public holidays are declared by the state, and include national days like New Year’s Day and Australia Day, as well as NSW‑specific public holidays. There can also be additional local (regional) holidays.

Your obligations for pay and penalty rates are triggered when an employee works on an actual public holiday in their location, or when a public holiday is substituted in accordance with an applicable award or agreement.

Public holidays are recognised under the Fair Work Act 2009 (Cth). That means the right to be absent and the rules about requesting or refusing to work apply nationally, even though the dates themselves are set by NSW.

NSW Public Holiday Pay Rates: How Do They Work For Employers?

There’s no single “NSW public holiday rate” that applies to every worker. Public holiday pay rates are typically set by the applicable modern award or enterprise agreement for the role and industry.

Here’s how it generally breaks down for Australian small businesses employing staff in NSW.

1) If Your Employee Does Not Work On The Public Holiday

• Permanent employees (full-time/part-time): If the day is their ordinary working day, they’re entitled to be absent and to be paid their base rate of pay for their ordinary hours (no penalty loading, allowances or overtime). If it’s not an ordinary day for them, no payment is owed.
• Casual employees: Casuals don’t receive paid public holidays. If they don’t work, they aren’t paid.

2) If Your Employee Works On The Public Holiday

• Penalty rates apply: Most awards require higher “public holiday” penalty rates for hours worked. The exact percentage varies by award and role. To check the precise rate for a classification, use the Fair Work Pay Calculator.
• Casuals working on a public holiday: Casual penalty rates are typically calculated on top of the casual loading. Again, the exact rate (and whether it compounds or is incorporated) depends on the award.
• Minimum engagement: Many awards set a minimum number of hours when working on a public holiday (often 3-4 hours). If your staff clock less than the minimum, you may still have to pay the minimum.
• Substitution or TOIL: Some awards allow a substituted day off or time off in lieu (TOIL) by agreement instead of the full penalty rate. Check your award terms and make sure any agreement is documented properly.

Because penalty rates are a common source of mistakes, it helps to understand the basics of penalty rates more broadly and how they interact with ordinary hours and overtime.

3) Reasonable Requests To Work - And Reasonable Refusals

Under the Fair Work Act, you can request an employee to work on a public holiday, and they can refuse if the request (or refusal) is not reasonable. Whether something is “reasonable” depends on factors like the nature of your business, the employee’s personal circumstances, and the amount of notice provided. Good communication and fair rostering help avoid disputes here.

Public Holiday Pay Rates Aren’t One‑Size‑Fits‑All: Awards And Agreements

Public holiday rates differ from award to award, and enterprise agreements can set different terms again (provided they pass the Better Off Overall Test). Common points of variation include:

• The percentage loading for public holiday hours.
• Whether casual loading compounds with the public holiday loading.
• Minimum engagement periods on public holidays.
• Whether substitution or TOIL is allowed and on what terms.

To get the numbers right, always check the correct instrument for each employee. If you’re unsure which award applies or how to interpret the rates, consider a quick award compliance check to confirm your obligations before a busy trading period.

How To Calculate Public Holiday Pay (Without Guesswork)

Public holiday pay calculations typically follow this logic:

1. Confirm the date is a public holiday for the employee’s work location.
2. Identify the employee’s classification and applicable instrument (award or enterprise agreement).
3. Work out their ordinary hours vs any overtime.
4. Apply the public holiday penalty rate for hours worked (and any minimum engagement rules).
5. For permanent staff who don’t work, pay the base rate for their ordinary hours if the day is an ordinary working day.

When you need award-specific numbers, the Fair Work Ombudsman’s tool is reliable - our guide shows how to use the Pay Calculator effectively so you’re not relying on guesswork or outdated rate sheets.

Remember, rates change with annual wage reviews. If you’ve searched “public holiday pay rates 2023”, make sure you update your payroll settings for the current year before the next public holiday.

Rostering, Overtime And TOIL: Practical Issues To Get Right

Public holidays often bring unusual trading hours, higher demand, and roster changes. That’s where planning (and the right paperwork) matters.

Rostering And Notice

Many awards and the Fair Work Act include rules about roster changes and reasonable notice. Align your scheduling with the legal requirements for employee rostering, and make sure any request to work on a public holiday is reasonable in the circumstances.

Overtime Vs Public Holiday Penalties

On a public holiday, employees can attract the public holiday penalty rate for ordinary hours, and a different overtime rate once they exceed ordinary hours. How these interact depends on the award. If your team regularly works weekends, it’s worth refreshing how weekend pay rates and public holiday rates are treated under your instrument.

Time Off In Lieu (TOIL)

Some awards permit TOIL instead of paying overtime or penalty rates, but only on strict terms (e.g. written agreement, timeframes, and audit trail). If you’re considering TOIL for public holidays, ensure your agreements reflect the award and follow best practice for time off in lieu.

Meal And Rest Breaks

Busy public holiday shifts don’t remove your break obligations. Check applicable award rules and keep your roster compliant with meal breaks and rest breaks - especially for longer or late‑night trading hours.

Maximum Hours

Even on public holidays, maximum weekly hours and reasonable additional hours rules still apply. Keep an eye on cumulative load and ensure you’re within the maximum hours requirements.

Common Public Holiday Scenarios For NSW Employers

Scenario 1: Part‑Timer’s Public Holiday Falls On Their Usual Day Off

If the public holiday falls on a day the part‑time employee doesn’t usually work, they’re not entitled to payment for that day. If they do work, apply the public holiday rate per the award.

Scenario 2: Casual Works A Short Shift On A Public Holiday With A 4‑Hour Minimum

Where an award sets a 4‑hour minimum engagement on public holidays, a 2‑hour shift can still trigger 4 hours of public holiday pay at the appropriate casual rate. Double‑check your award before scheduling ultra‑short shifts.

Scenario 3: Substituted Public Holiday

Some awards allow you and an employee to agree to substitute the public holiday for another day. If a valid substitution occurs, treat the substitute day as the public holiday for entitlement purposes. Keep the agreement in writing.

Scenario 4: Shutdown Periods

If you close over a holiday period, check your award’s shutdown clause. Public holidays during a shutdown are generally paid as public holidays for permanent staff (base rate for ordinary hours) and don’t come out of annual leave.

Set Yourself Up: Contracts, Policies And Payroll Hygiene

Clear documentation reduces confusion when public holidays arrive. Consider the following foundation pieces.

• Employment Contract (full-time/part-time): Set out classification, ordinary hours, and how public holiday work is handled in line with the award or agreement.
• Casual Employment Contract: Make sure casual terms reflect the correct loading, minimum engagements, and any TOIL arrangements permitted by the award.
• Staff Handbook or workplace policies: Explain your rostering practices, TOIL procedures, notice for public holiday work, and payroll cut‑offs to keep your team informed.
• Payroll processes: Configure your software with up‑to‑date award rates, public holiday codes, and minimum engagements - and audit after each rate increase.
• Record‑keeping: Keep written agreements for any substitution or TOIL and make sure payslips mirror what the award requires (e.g. hours and penalty categories).

A little set‑up work saves you from rushed decisions and potential backpay issues later.

Compliance Checklist For The Next Public Holiday

1. Confirm the date: Verify it’s a public holiday for your business location and staff.
2. Identify the instrument: Check the award or enterprise agreement for each role.
3. Plan your roster: Give reasonable notice and consider who can reasonably work.
4. Apply the correct rates: Use the Pay Calculator and your award to set shift rates and minimum engagements.
5. Clarify breaks: Ensure meal and rest breaks are scheduled per the award.
6. Use TOIL carefully: Only if permitted under the award, with written agreements.
7. Run payroll checks: Cross‑check payslips to confirm the correct penalty categories and base pay for non‑working permanent staff.
8. Keep records: File rosters, agreements, and calculations in case of audit.

Avoiding Underpayments And Disputes

Underpayments commonly arise from applying the wrong award, using old rate sheets, missing minimum engagements, or lumping all hours at one rate when public holiday hours and overtime should be separated.

To reduce risk:

• Always apply the current award classification and rate for each employee.
• Segment timesheets by penalty category (public holiday ordinary hours vs overtime).
• Automate award interpretation in your payroll system where possible.
• Educate managers who create rosters so they understand the cost and rules of public holiday shifts.
• Do periodic spot checks after major public holidays or annual rate increases.

Key Takeaways

• Public holiday pay rates in NSW are set by national law and, in most cases, your employee’s applicable award or enterprise agreement.
• Permanent staff who don’t work on a public holiday and would ordinarily work that day are paid their base rate for their ordinary hours; casuals are only paid if they work.
• When staff work on a public holiday, penalty rates and minimum engagements usually apply - confirm the exact settings under your award and use the Fair Work Pay Calculator.
• Plan ahead for rostering, overtime, TOIL, breaks and maximum hours so your public holiday trading stays compliant and efficient.
• Put solid foundations in place with clear Employment Contracts, a Staff Handbook, and accurate payroll configurations to avoid underpayments.
• If you’re unsure which award applies or how to implement the correct rates, an award compliance check can save time and reduce risk.

If you would like a consultation on managing public holiday pay rates in NSW for your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.