Bookkeeping & Payroll for Hospitality Venues

Saturday penalty rate is 25% loading on the base wage. Sunday is 50% loading. Public holidays are 150% of the base wage if the public holiday falls on a day the employee would normally work, or 100% if it's a day they don't normally work. Some allowances (like meal allowances) may be added to the base wage for calculation purposes. These rates are indexed annually in September. Always apply the rate in effect on the date of work, not the date of payment.

Each shift period is calculated separately. If an employee works lunch service (12pm–2pm, 2 hours) and dinner service (6pm–10pm, 4 hours) on a Saturday, you pay them for 6 hours total at the Saturday penalty rate (25%). The unpaid break between shifts is not paid. If the split shift spans a change in penalty rates (e.g., lunch on a Saturday, dinner on Sunday), apply the appropriate rate to each portion. Record the shift patterns to ensure consistency.

Failure to pay public holiday loadings is a breach of the Award and Fair Work Act. An employee can lodge a claim with Fair Work Commission for underpayment, and you're liable for back-pay plus interest and penalties. The impact scales with the number of employees and shifts affected. For example, if you underpaid 10 staff by $50 per public holiday for a year, that's $500 in back-pay plus interest and administrative penalties. Always pay the correct public holiday rate on the day worked.

Most hospitality staff don't accrue RDOs—they're paid for all hours worked at applicable rates. However, if you have an agreement with an employee to accrue RDOs, they accrue at a rate of 1 RDO per 20 working days worked (approximately 1 per 4 weeks for full-time staff). RDOs must be taken by mutual agreement within 12 months of accrual. When an RDO is taken, it's paid at the employee's ordinary rate (excluding penalties), unless it falls on a weekend or public holiday. Document RDO agreements in writing to avoid disputes.

The base wage typically includes the minimum wage rates set out in the Hospitality Award for the employee's classification (e.g., Level 1, Level 2), plus any service-based or competency-based allowances. Meal allowances, area allowances, and other prescribed allowances in the Award are often included. Bonuses, gratuities, and commission are not usually included in the base wage for penalty rate calculations. Always check the Award definition or your industrial agreement for clarification, as some venues have negotiated agreements that vary this calculation.

Tips paid directly to staff are generally treated as wages and are subject to PAYG withholding tax and superannuation contributions. You must record tips received by each employee and include them in their gross income. Discretionary tips (like a percentage added to a bill) are treated differently depending on whether they're distributed to staff or retained by the venue. Best practice is to record all tips in payroll, apply tax and super accordingly, and keep clear records for ATO audit purposes. Speak with your accountant about your specific tip distribution model.

The Hospitality Industry (General) Award is indexed annually on 1 September each year. From that date (or the first pay period on or after 1 September), you must apply the new minimum wages, allowances, and penalty rate percentages. The Fair Work Commission publishes the new rates before 1 September each year. Failure to apply rates on time constitutes underpayment. Set a reminder to check the Fair Work website in August each year and update your payroll system.

Yes. When an employee takes annual leave, they're entitled to be paid their ordinary rate plus an additional 17.5% annual leave loading (unless they're entitled to a higher loading under an agreement). The loading is designed to compensate for the non-working period. Some agreements or state-specific rules may allow you to 'cash out' the loading at separation (i.e., pay it when they leave rather than when they take leave), but generally, loading is due when leave is taken. Always include leave loading in final pay calculations.

Keep records showing: employee name, address, and employment dates; hours worked each day (including start/end times); rates of pay and penalty rates applied; amounts paid; leave accrual and taken; tips received; and any agreed variations to the Award. Records must be kept for 7 years. Use a time and attendance system or shift roster to document hours; don't rely on memory. Fair Work may request these records if an employee lodges a claim, and poor record-keeping can result in penalties even if you believe you paid correctly.

For casual employees, you don't owe annual leave or long service leave (unless your agreement specifies otherwise). However, you must pay any accrued and unused leave (if entitled under the Award), superannuation contributions up to date, and any bonuses or agreed entitlements. Calculate their final pay by: (1) calculating hours worked in the final pay period at applicable rates, (2) adding any accrued leave days multiplied by their ordinary hourly rate, and (3) ensuring all super has been paid to date. Provide a final pay slip showing all deductions and entitlements. Process final pay within one pay cycle.