Public holidays are the single most failure-prone payroll event for Australian businesses.
Not because teams don’t care, but because public holiday rules sit at the collision point of awards, state legislation, roster patterns, and employment status. Unlike ordinary hours, public holiday entitlements change by location, calendar date, and whether an employee would have otherwise worked that day.
The risk is real.
The Fair Work Ombudsman has recovered more than $1.5 billion in unpaid wages since 2017, with payroll errors and incorrect application of award conditions repeatedly cited as a leading cause.
Public holidays amplify these errors because they introduce substituted dates, regional holidays, Easter variations, and award-specific exceptions that national calendars and manual checks routinely miss.
Most public holiday mistakes are not deliberate. They happen when rostering, time capture, and payroll are not tightly connected and payroll teams are forced to make judgement calls each holiday. That is where small inconsistencies turn into systemic underpayments.
Preventing public holiday payroll errors starts with recognising the risk and designing payroll processes that remove interpretation altogether, before payroll is ever run.
8 Common Public Holiday Mistakes
This guide breaks down seven of the most common public holiday payroll errors and provides practical solutions to avoid them, backed by insights from payroll compliance experts.
- Ensure Parity across Cultural Leave Calendars
- Configure Award Settings and State Holidays
- Automate Otherwise Worked Day Rules
- Base Entitlements on Usual Days
- Keep Staff Roster Records and Verify
- Catch Substituted Dates with Location Ties
- Set Casual Penalty Rates per Region
- Handling Payroll within a 24/7 Business
Ensure Parity across Cultural Leave Calendars
Recruiting a more diversified workforce brings many strengths to companies, but it can also create challenges for HR teams due to different cultural and religious holidays that some team members will be required to take off work in comparison to others.
It is important to remain respectful of all holidays and operate a unified entitlement structure that ensures no team members find themselves with fewer designated days away from the office than others.
Adopting global time-management systems that account for cultural leave patterns helps businesses plan staffing more comprehensively while avoiding shortfalls at critical times.
Chris Groome, Head of New Business, Access People SMB (Access Paycircle)
ClockOn insight: Parity issues usually arise when cultural leave is handled manually while public holidays are systemised.
That creates uneven treatment across accruals, reporting, and audit trails. The fix is defining cultural leave types as structured payroll rules so they are tracked, paid, and reported with the same consistency as public holidays.
If leave exists outside the payroll system, it will eventually create imbalance.
Configure Award Settings and State Holidays
One public-holiday mistake seen repeatedly in Australian payroll operations is assuming a single, uniform entitlement applies to all employees regardless of award, state legislation, or roster pattern.
Underpayments are frequently linked to incorrect public holiday treatment when payroll calendars are not aligned to state-specific holidays or when employees are paid incorrectly for non-working days.
This risk is mitigated through award-level payroll configuration, automated state-based holiday mapping, and pre-pay-cycle validation that flags discrepancies before payroll is processed.
Anupa Rongala, CEO, Invensis Technologies
ClockOn insight: The most effective control here is award-level holiday mapping tied to employee location, combined with pre-pay validation.
If the system cannot tell you why a public holiday applies, it should not be paying it.
Correct configuration removes judgement calls before payroll is ever run.
Automate Otherwise Worked Day Rules
The most common pitfall for businesses is treating public holiday eligibility as a manual management decision rather than a system-defined rule.
Many organisations struggle to define “otherwise worked day” logic programmatically, which leads to inconsistent payments for part-time employees as rosters shift.
Moving from human interpretation to automated, rule-based logic removes the potential for error and preserves employee trust in payroll accuracy.
Girish Songirkar, Delivery Manager, Enterprise Software Engineering, ArionERP
ClockOn insight: “Otherwise worked day” errors occur when eligibility is decided at payroll time instead of being system-defined.
This rule must be derived from historical roster patterns, not manager discretion. If humans are deciding this each holiday, errors are guaranteed.
Base Entitlements on Usual Days
Award clauses governing public holidays are inconsistent and often misunderstood.
Under the Fair Work Act, an employee is only entitled to public holiday benefits if they would normally have worked that day.
Businesses make costly errors when they base entitlement on employment status or location instead of roster history and patterns of work.
Anush Gasparian, Human Resources Director, Phonexa
ClockOn insight: Public holiday entitlement is based on usual days worked, not employment type.
Using roster history as the entitlement trigger aligns payments with legislation and prevents over- or underpayment driven by assumptions.
Keep Staff Roster Records and Verify
One of the biggest mistakes operators make is assuming all staff receive the same public holiday treatment.
Maintaining a simple roster-pattern record for each employee allows managers to quickly verify entitlements before processing payroll.
Using payroll software that understands awards and validates outcomes allows business owners to focus on operations rather than memorising legislation.
Janice Kuz, Owner, Flinders Lane Cafe
ClockOn insight: Roster records are both an accuracy tool and compliance evidence.
- Roster history supports entitlement verification
- Changes over time explain outcomes
- Pre-pay validation reduces disputes
If an entitlement cannot be verified from records, it is already a risk.
Catch Substituted Dates with Location Ties
One of the most common public holiday errors is paying entitlements on the wrong day due to reliance on national calendars.
Substituted public holidays, state-specific variations, and regional show days are frequently missed unless entitlements are tied to employee location and award coverage.
Running pre-payroll checks and locking rosters early prevents errors that can escalate quickly into compliance breaches.
Callum Gracie, Founder, Otto Media
ClockOn insight: National calendars are insufficient for Australian payroll.
Substituted and regional holidays must be tied to employee location and award coverage or they will be missed repeatedly.
Set Casual Penalty Rates per Region
Casual penalty rates on public holidays are one of the most frequently misapplied payroll rules.
Paying a flat rate plus loading may work for weekends, but it fails on public holidays where penalties often exceed 200 percent.
One missed penalty on a long shift can result in significant backpay exposure.
Justin Clarkson, Head of Marketing, Ever After Weddings
ClockOn insight: Casual public holiday penalties are rarely flat-rate.
The only reliable control is award-driven rate calculation applied automatically at the timesheet level.
Handling Payroll within a 24/7 Business
As we are covered via the SCHADS Agreement, we have a number of payments that cover public holiday periods.
If a leave day starts before a public holiday, hours may be misclassified if payroll systems cannot interpret cross-day entitlements.
The same issue applies to shift penalties in continuous operations.
Tim Tingiri,
Payroll Manager, Gateways Support Services
ClockOn insight: Cross-day shifts expose a common payroll blind spot.
Entitlements must be applied based on when hours are worked, not when a shift starts.
