Understanding Public Holiday Pay
Understanding Public Holiday Pay: What Payroll Professionals Need to Know
Public holidays are an essential part of the employment landscape, offering employees well-deserved rest while marking significant national events. For payroll professionals, however, public holidays introduce complexities that require a solid understanding of labour law, employee contracts, and company policy. Ensuring accurate public holiday pay not only guarantees compliance but also builds trust and fairness within the workforce.
What Constitutes Public Holiday Pay?
Public holiday pay refers to the remuneration an employee is entitled to when a public holiday falls on a normal working day. Employees who do not work on a public holiday but would ordinarily have worked on that day are generally entitled to their regular pay. This is typically calculated based on their normal daily wage.
For example, if a monthly paid employee has a fixed salary, their public holiday pay is already included in the monthly wage. But if an employee is on a daily or hourly rate, and the public holiday falls on their regular working day, they must be paid their usual rate for that day—even if they do not work.
When Employees Work on Public Holidays
If an employee works on a public holiday, they are entitled to be paid at least double their ordinary rate of pay for the hours worked. This ensures fair compensation for giving up a statutory day of rest.
Let’s say an employee earns $50 per hour and works 8 hours on a public holiday. Their public holiday earnings should be at least $800 ($50 x 8 x 2). Some employers even offer additional time off in lieu, depending on company policy.
Calculating Public Holiday Pay for Different Pay Structures
The calculation of public holiday pay may differ depending on how employees are compensated:
- Monthly-paid employees generally have their public holiday pay covered within the month’s salary, provided they are on paid leave or working a regular schedule.
- Hourly or daily paid employees need a calculation based on the average daily earnings over a set period. This average ensures a fair rate is paid, especially when earnings fluctuate week to week.
- Commission-based or piece-rate workers may also need an average earnings calculation, ensuring that public holiday pay reflects typical income.
Overtime on Public Holidays
Overtime worked on public holidays requires special attention. Since the public holiday pay is already doubled for working that day, if any work qualifies as overtime, it should be compensated over and above the holiday rate. The total pay could be more than double the usual rate, depending on how company policies define and calculate overtime.
For businesses using Belina software, managing overtime on public holidays is more streamlined. Employees can apply for overtime via Belina Connect, and once those claims are approved by supervisors, they are automatically fed into the payroll system for processing. The same applies to users of the Belina Time Control module. If an employee works overtime on a public holiday, this reflects on the timesheet, and once verified, is processed directly in the payroll—saving time, reducing errors, and ensuring accuracy.
Best Practices for Payroll Teams
- Verify Employment Terms: Always refer to employment contracts and internal policies to ensure the method of calculating holiday pay aligns with what was agreed upon.
- Keep Detailed Records: Especially for hourly and part-time workers, ensure attendance and pay records are accurate. Historical data is key when calculating average earnings for holiday pay.
- Automate Where Possible: Using payroll software that integrates with time management and employee self-service tools can drastically reduce the risk of error, particularly when calculating overtime and public holiday work.
- Stay Updated: Public holiday schedules can change. Always ensure your payroll calendar reflects the current list of gazetted public holidays.
Final Thoughts
Public holiday pay is more than just a statutory requirement—it’s a reflection of fairness and respect for your workforce. For payroll professionals, mastering its application builds confidence among employees and strengthens the integrity of payroll operations. With the right tools, such as those provided by Belina Payroll and its automation capabilities through Connect and Time Control, managing public holiday pay can be both accurate and effortless.
By Ashlene Moyo