Are you overpaying your staff for public holidays?

Every public holiday that comes around brings a smile to the face of employees who normally work them, either because they get a paid day off, or extra pay for working on the day.

Probably not so much for employers and payroll managers though…  as getting the pay right for employees is challenge for those that don’t know the rules.  This could mean you are overpaying your employees, or worse yet, underpaying them!

What are they entitled to?

Any employee who agrees to work on a public holiday must be paid time and a half for all hours they work.

In addition, if the public holiday falls on a day an employee would normally work, then the employee is also entitled to a paid day off at another time (called an alternative holiday).

Employees must be paid public holiday, if they would normally have worked on that day if it hadn’t been a public holiday. If they don’t normally work on the particular, they don’t get paid for it.

How much do they get paid?

Well that depends on what they would have got paid had they come to work.  You must pay employees their relevant daily pay for a paid unworked public holiday. Relevant daily pay is the amount the employee would have been paid had they worked that day.  It includes overtime, and productivity or incentive payments like commissions, if they would have received those had they worked on that day.

An employer may use the average daily pay calculation for the purposes of calculating the payment due for public holidays only IF it is not possible or practical to determine an employee’s relevant daily pay.

If an employee is on a salary and works on a public holiday, they must be paid time and half for the hours they work on the public holiday.

Payment for public holidays is such a massive topic for employers and payroll managers.   Other common questions we receive are

  • can we make employees work on public holidays?
  • what if they call in sick when working on a public holiday?
  • what about those public holidays that fall in the middle of annual holidays?

These are questions that myself and my team get all the time which is why all the core topics are covered in depth in our upcoming Small Business Training Hub payroll training courses that start in August.     If you would like to find out more, or register for a training, all the information is here on our website – Small Business Training Hub Payroll Courses


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