Public Holiday Surcharges Increasing in Australian Hospitality Sector

Public holiday surcharges are becoming increasingly common in the hospitality sector, as business owners assert their necessity in offsetting extra wages.

Millions of Aussies will encounter a public holiday surcharge if they choose to visit a cafe, restaurant, or pub today. Although the additional cost, typically between 10 to 15 per cent, may appear steep amid the ongoing cost-of-living crisis, Australian business proprietors argue that these surcharges are essential for their operations.

Ruby Rule, who owns three cafes in Queensland, has implemented a 15 per cent public holiday surcharge. She explained to Yahoo Finance that opening on public holidays incurs thousands of dollars in added expenses, and the surcharge assists in covering some, but not all, of these costs.

“Opening on public holidays costs us around an extra $3,000, some of which is recuperated through the 15 per cent public holiday surcharge,” Rule stated, referring to her establishments, Bramble Bay General, Bone Yard Espresso, and Boney's Deli.

“We apply this charge when we are working too, as we pay ourselves proper wages.”

Hospitality staff are entitled to penalty rates on public holidays, which can be double their standard wage. This year's Australia Day fell on a Sunday, classifying it as a normal working day, hence holiday penalty rates were not applicable.

Nonetheless, public holiday entitlements apply to work performed today, January 27.

During a recent public holiday, Rule reported earning $719 from the surcharge combined across her three cafes, which operated under reduced hours.

The wages for her nine employees for that day amounted to $3,500, averaging a total of 55 hours worked. On a typical working day, she noted that wages would be around $1,800, resulting in a $1,700 difference.

This demonstrates that the surcharge did not even cover a majority of the additional wage expenses incurred.

Dan Dick, owner of Born and Raised Coffee and Nigel cafes in Melbourne, conveyed that businesses simply cannot bear the public holiday rates.

“Essentially, the casual award rates range from $30 to $60 an hour, and any full-time employees earn a day in lieu. Thus, it is not feasible for businesses to absorb those costs,” he noted to Yahoo Finance.

“I think it's crucial for everyone to realise that these surcharges are essential for the ability to visit your preferred venues, which often operate at a loss on these days.”

Are businesses allowed to impose surcharges? Yes, businesses are permitted by law to add surcharges on public holidays and weekends, though specific regulations apply.