Public holidays in Australia and how they affect pay
Reviewed by Mellow Editorial Team, HR & payroll content team
Public holidays in Australia are paid days off for eligible employees, and when someone works on a public holiday they are generally entitled to penalty rates — the exact rate depends on the applicable award or enterprise agreement.
How public holidays are set
Australia has a two-layer system. A small number of national public holidays apply everywhere: New Year's Day, Australia Day, Good Friday, Easter Saturday, Easter Monday, Anzac Day, the King's Birthday (federal workers), Christmas Day and Boxing Day. Beyond that, each state and territory sets its own additional holidays — Melbourne Cup Day in Victoria, the Brisbane Exhibition (Ekka) in Queensland, Adelaide Cup in South Australia, and so on.
The practical upshot: if your workforce spans more than one state, you may be managing different public holiday calendars simultaneously. A Sydney employee and a Melbourne employee can be working from the same team on different days simply because of where they live.
What employees are entitled to on a public holiday
Under the National Employment Standards (NES), full-time and part-time employees are entitled to be absent from work on a public holiday without loss of pay, provided the day would otherwise have been a working day for them.
A few points worth knowing:
- Ordinary pay applies. The payment is based on the employee's ordinary hours they would have worked, at their base rate. It does not include overtime, penalties or allowances they might have earned.
- Part-time employees are only entitled to the day off with pay if the public holiday falls on a day they are ordinarily rostered to work.
- Casual employees have no entitlement to public holiday pay under the NES because they are not guaranteed hours.
- Employees on leave retain their entitlement. If a public holiday falls during a period of annual leave, the employee must be credited back that day — it counts as a public holiday, not a leave day.
Working on a public holiday
An employer may ask an employee to work on a public holiday, but the request must be reasonable and the employee has the right to refuse on reasonable grounds. What counts as reasonable cuts both ways — operational necessity on one side, personal or family commitments on the other.
When an employee does work on a public holiday, the NES sets the floor but the actual pay rate comes from the relevant modern award or enterprise agreement. Most awards provide a penalty rate for public holiday work — commonly expressed as a multiplier on the ordinary rate, such as double time or double time and a half. Check the specific award that covers your employees through Fair Work's pay and conditions tool; the rate varies by industry and occupation.
Some awards also provide an alternative: instead of extra pay, the employee takes a substitute day off in lieu. If you use this option, make sure it is captured clearly in writing.
Substitution of public holidays
Employers and employees (or a majority of employees) can agree to substitute a public holiday for another day. This needs to be a genuine agreement and should be documented. A common scenario is swapping a mid-week public holiday to a Monday to create a long weekend, or substituting a religious holiday that aligns better with the workforce's observances.
State and territory laws also allow certain public holidays to be observed on a different date — for example, when Christmas Day falls on a weekend, the observed public holiday may shift to the Monday. Always check which date is the gazetted holiday in each relevant jurisdiction.
Payroll and STP obligations
Public holidays affect payroll in a few concrete ways. Paid public holiday absences are reported through Single Touch Payroll (STP) like any other pay event. If an employee works and earns a penalty rate, that higher rate flows through to their gross earnings in the same pay run.
Make sure your payroll records distinguish between ordinary pay, public holiday pay and public holiday penalty pay. This separation matters if you are ever audited or if an employee queries their pay. It also feeds correctly into superannuation calculations: the Superannuation Guarantee (currently moving to 12% of ordinary time earnings from July 2025) applies to ordinary time earnings, so whether a public holiday payment counts as ordinary time earnings or as an additional penalty can affect what super is owed — check the definition under your relevant award.
Keeping track across a distributed team
The administrative burden grows quickly when employees are spread across states. A Melbourne Cup Day penalty for a Victorian employee needs to be processed on a day when your Sydney-based payroll team may not even know there is a public holiday. Build a jurisdiction-specific calendar into your payroll system at the start of each financial year so the correct rules apply automatically to each employee based on their work location, not your head office's address.
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