The public holiday surcharge in New Zealand: what you can charge, and whether it covers the day

A public holiday surcharge is legal in New Zealand, provided customers can see it before they buy. If you present it as covering the extra cost of the holiday, it must not be more than the costs you actually incur, and it belongs only on days that are genuinely public holidays for your staff. The familiar 15% is an industry habit, not a rule.

That’s the legal part, and it fits in a paragraph. The more useful question is the one most owners never get to: does the surcharge actually pay for the day? For some cafés, 15% is generous. For others, especially with a full roster of permanent staff, it doesn’t come close. This summer’s calendar adds a complication: three of the holidays fall on Saturdays.

What does the Commerce Commission actually require?

The Commission’s position hasn’t changed in years, and its 2021 guidance on public holiday surcharges is still the clearest statement of it. Three points matter:

1. You can set your own prices. A surcharge is allowed. Nobody has to approve it.
2. It must be disclosed before purchase. The Commission’s examples are a notice on your website or a sign outside. A line on the receipt after the meal isn’t enough.
3. If it’s tied to costs, it can’t exceed them. In the Commission’s words, “the surcharge should not exceed those costs, and the costs should actually be incurred by the business.”

The law behind it is the Fair Trading Act 1986. The Commission notes penalties of up to $600,000 for a company and $200,000 for an individual per offence. Only the courts decide whether a breach has happened, but nobody wants to be the test case.

One thing to keep separate: the proposed ban on in-store card payment surcharges, the Retail Payment System (Ban on Merchant Surcharges) Amendment Bill, is about card fees, not public holidays. A public holiday surcharge is a price for trading on the day, not a fee for how the customer pays.

Which days this summer can carry a public holiday surcharge?

This is where owners slip up, and the 2026–27 summer makes it easier to slip. Employment New Zealand’s rule on weekend public holidays depends on each worker. If someone would normally work the Saturday, the holiday stays on Saturday for them. If they wouldn’t, it moves to the Monday (“Mondayisation”).

Date	Public holiday?	Who it applies to
Thu 24 Dec (Christmas Eve)	No	Nobody
Fri 25 Dec (Christmas Day)	Yes	All staff
Sat 26 Dec (Boxing Day)	Yes, for some	Staff who normally work Saturdays
Mon 28 Dec	Yes, for some	Staff who don’t normally work Saturdays but would work Monday
Thu 31 Dec (New Year’s Eve)	No	Nobody
Fri 1 Jan 2027	Yes	All staff
Sat 2 Jan / Mon 4 Jan	Split, as for Boxing Day	Depends on usual working days
Sat 6 Feb / Mon 8 Feb (Waitangi Day)	Split, as for Boxing Day	Depends on usual working days
Fri 26 Mar / Mon 29 Mar 2027 (Easter)	Yes	All staff
Sat 27 / Sun 28 Mar 2027	No	Nobody

Your regional anniversary day is also a public holiday, so check the date for your region on the Employment New Zealand dates page.

The split days are where the Commission’s “costs actually incurred” test bites. For a café open seven days, Saturday 26 December is a public holiday for the weekend crew. Monday 28 December may be one for weekday staff. If your Monday roster is mostly weekend workers, Monday is an ordinary day for them and a surcharge is hard to defend. Look at the roster before you set the POS, not after.

What does a public holiday actually cost you?

Employment New Zealand sets out the public holiday pay rules. Someone who works a public holiday gets at least time and a half for the hours worked. If it was an otherwise working day for them, they also get an alternative holiday: a full paid day off later, paid at their normal daily rate for the day they take it.

So the true extra cost of a public holiday has up to four parts:

• The half in time and a half, for every hour worked.
• Alternative holidays, a full paid day for each eligible worker, whether they worked two hours or ten.
• Employer KiwiSaver on the extra pay, at least 3.5% since 1 April 2026.
• Any other costs that genuinely rise, such as a supplier’s holiday delivery charge.

The alternative holiday is the part people forget, because it’s paid weeks later. It’s still a cost of opening on the holiday. You’re paying someone for a day they don’t work, and often paying someone else to cover it. Casual staff hired only for the day, or rostered on a day they wouldn’t normally work, get time and a half but no alternative holiday. That’s why two cafés on the same street can have very different costs. Our holiday pay basics page covers the wider leave rules.

How do you work out the right surcharge?

The formula is short:

Break-even surcharge % = extra cost of the day ÷ expected sales on the day (GST-exclusive)

Use GST-exclusive sales because GST is added to the surcharge too, so 15% of the price you show is not 15% you keep. If your menu prices are GST-inclusive, the percentage works out the same either way. Just don’t count the GST portion of the surcharge as money towards wages. Our page on GST-inclusive pricing explains why consumer prices are shown that way.

If your sales usually drop on a holiday, use that lower figure, not a normal Saturday’s takings. A thin day spreads the same cost over fewer coffees.

An illustrative example: a Tauranga café on Boxing Day

This is a made-up example to show the arithmetic. It isn’t a real business.

A Mount Maunganui café plans to open on Saturday 26 December. Five permanent staff normally work Saturdays, so Boxing Day stays on Saturday for all of them. Each is rostered for 7 hours at $26 an hour. The owner expects $6,000 in GST-inclusive sales, or $5,217 excluding GST.

	Wages only	Full cost
Ordinary wages (35 hrs × $26)	$910	$910
Extra half-time	$455	$455
Alternative holidays (5 × 7 hrs × $26)	—	$910
Employer KiwiSaver at 3.5% on the extra	$16	$48
Extra cost of the day	$471	$1,413
Break-even surcharge	9.0%	27.1%

A 15% surcharge on $5,217 of GST-exclusive sales brings in about $783 after GST. That more than covers the time and a half. But it pays for only about 55% of the full cost once five alternative holidays are counted.

So the owner has three honest choices. Charge 15% and accept the day as part-funded. Roster some casuals who aren’t due an alternative holiday, which lowers the cost and makes 15% closer to break-even. Or set a higher surcharge that can be explained and backed up with the roster. None of these breaks the rules, because in each case the surcharge doesn’t exceed the real cost. What the owner can’t do is leave that 15% running on Monday 28 December, when none of the five has a public holiday.

If you’re unsure whether trading the holiday is worth it at all, run the numbers through our break-even point method first. Some owners find they make more by closing.

If the arithmetic shows the summer needs a cushion as well as a surcharge, it’s worth checking your funding options in October rather than in the second week of January.

How should you display a public holiday surcharge?

Disclosure is the part the Commission checks, and it’s cheap to get right:

• A sign at the entrance, readable before anyone sits down or queues.
• On the menu, board or counter, with the percentage and the reason (“15% public holiday surcharge applies today”).
• In online ordering, QR menus and delivery apps. This is where surcharges most often go missing. If the app can’t show it, consider turning the surcharge off for those orders.
• Itemised on the receipt, so the total matches what was promised.
• Only on the right day. Set the POS rule for the date, and check it’s switched off at close. A surcharge still running on 27 December is the classic mistake.

Train staff to give the same one-line answer if a customer asks why: it’s a public holiday, so the team is paid time and a half and earns a day off.

Is a surcharge better than a permanent price rise?

Not always. A surcharge works for a handful of days a year. If your margin is thin every day, the problem isn’t the public holiday. A small price rise across the board may do more, and annoy fewer people, than 27% on Boxing Day. Our price-rise calculator shows how many sales you could lose and still keep the same gross profit.

Also plan the timing of the cash. The alternative holidays you earn over summer are paid when staff take them, often in February and March. That’s on top of the summer close-down squeeze, January provisional tax and GST, and any Christmas bonuses whose PAYE falls due on 20 January.

Trading through the holidays shouldn’t mean running out in February

Opening on a public holiday is often the right call. Locals and visitors are out, and the till can have its best day of the season. The catch is that the cost arrives in pieces: time and a half in the next pay run, alternative holidays weeks later, and a quiet stretch once the visitors leave. A sensible surcharge helps. It doesn’t always close the gap.

That gap is something we help New Zealand hospitality and retail owners plan for. Depending on the business, that might be unsecured or cash-flow funding for trading businesses, typically $5,000 to $500,000 and sized on turnover and bank statements, or property-secured lending from $20,000 to $5,000,000. Lending is for business purposes only. Bad credit and IRD debt are considered case by case.

The enquiry takes about a minute, and there’s no credit check when you first enquire, so asking won’t leave a mark on your credit file. Your enquiry isn’t shopped around or passed to a string of lenders, so your phone won’t light up with calls from strangers. Someone who understands how a café’s summer really runs reads what you’ve sent and calls you. Please fill in the form accurately, especially your turnover and what the money is for, so the first conversation is about real options.

Find out where you stand →