Bookkeeping & Payroll for Hospitality Venues

They depend on more than the day. Under the Hospitality Industry (General) Award — and under the Restaurant Industry Award, which covers most standalone restaurants and eat-in cafés — the rate for a Saturday, Sunday, public holiday or evening shift varies with the employee's classification and with whether they are full-time, part-time or casual; casual employees have their own rates in the award's penalty table. Rather than work from a remembered percentage, look up the current rate for the specific classification and shift on the Fair Work Pay Calculator, or in the award's penalty rates clause, and apply the rate in effect on the day worked, not the day it is paid. Award rates change from the first full pay period on or after 1 July following the Annual Wage Review.

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 in total at the Saturday rate for their classification and employment type, plus any split shift allowance the award provides. The unpaid break between shifts is not paid. If a shift crosses a point where the rate changes — into the evening, or past midnight into a Sunday or public holiday — apply the applicable 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 raise an underpayment with the Fair Work Ombudsman, 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 the hours they work at the applicable rates. Accrued days off arise only where a full-time employee's ordinary hours are arranged that way under the Hospitality Award: clause 15.1 allows, for example, 160 ordinary hours over a four-week period with an accrued day off, accrued days can be banked up to a maximum of 5, and the award sets when they are taken (award text read 8 September 2026). When an accrued day is taken it's paid at the employee's ordinary rate. Document the arrangement in writing and check the current clause rather than working from a remembered formula.

Penalty rates in the award are expressed as a percentage of the minimum hourly rate for the employee's classification, with casual employees having their own rates in the penalty table. Allowances, bonuses, gratuities and commission generally sit outside that calculation. An enterprise agreement can vary the arrangement, so check the award's penalty rates clause or your agreement — and the Fair Work Pay Calculator for the current figure — rather than building the calculation from a remembered formula.

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.

Hospitality Industry (General) Award minimum rates change following the Fair Work Commission's Annual Wage Review, operative from the first full pay period on or after 1 July each year (the 2026 review lifted award minimum rates by 4.75%). From that date you must apply the new minimum wages and allowances. Failure to apply rates on time constitutes underpayment. Set a reminder to check the Fair Work website each June and update your payroll system before the first July pay run.

Where the award provides it — most modern awards, including the Hospitality Award, provide an annual leave loading. It is commonly 17.5% of the ordinary rate, but the percentage and the rules (including any alternative for employees who would have received penalty rates) come from the award's annual leave clause, so check the current clause rather than assuming. 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.