Public Holiday Surcharges In NZ Cafes And Restaurants

If you run a cafe, bar or restaurant in New Zealand, public holidays can be a double-edged sword.

On the one hand, you can see a surge in customers (especially in holiday hotspots). On the other hand, your costs can jump quickly - particularly wages, staffing levels, and sometimes supplier or delivery costs.

That’s why many hospitality businesses consider public holiday surcharges. But pricing changes can also create complaints, bad reviews, and legal risk if they’re not handled the right way.

Below, we break down what public holiday surcharges are, when they’re generally allowed, and what you should do to reduce risk under NZ consumer and employment law.

What Are Public Holiday Surcharges (And Why Do Hospitality Businesses Use Them)?

Public holiday surcharges are an extra percentage or fee added to a customer’s bill on a public holiday (for example, “10% surcharge applies on public holidays”). In hospitality, this is often used to help cover higher operating costs - especially staffing.

Common ways surcharges show up in cafes and restaurants include:

• A percentage surcharge (e.g. 10% or 15%) applied to the total bill
• A flat fee (less common, but sometimes used for set menus or bookings)
• A set public holiday menu where the pricing differs from a normal trading day

From a practical business perspective, public holidays can change your cost base very quickly. For example:

• You may need more staff on shift due to higher foot traffic
• Staff working on a public holiday may be entitled to higher pay rates under the Holidays Act 2003 (time-and-a-half, plus potentially an alternative holiday)
• You may have higher security, cleaning, or operational overheads

A surcharge can be a legitimate way to keep trading viable on days where you still want to be open - but it needs to be implemented carefully.

Are Public Holiday Surcharges Legal In New Zealand?

In general, public holiday surcharges can be legal in New Zealand - but you need to be careful about how you communicate them and apply them.

The key legal risk isn’t usually the surcharge itself. The risk is misleading pricing or unexpected charges that customers weren’t properly told about before they ordered (or at least before they paid).

The Key Consumer Law Issue: Don’t Mislead Customers About Price

Most issues around public holiday surcharges come back to consumer law principles, including obligations under the Fair Trading Act 1986 (which is all about not misleading or deceiving consumers).

In plain terms: if you advertise or display prices, you need to ensure customers aren’t misled about what they’ll actually pay.

That means your surcharge should be:

• Clearly disclosed (not hidden in tiny text)
• Accurate (applies exactly as described)
• Consistently applied (to avoid disputes and complaints)

It’s also important to remember that NZ consumer pricing is generally expected to be clear and “all up” for everyday customers. That typically means the price you display should include GST where GST applies, and any additional unavoidable charges should be disclosed in a way that doesn’t create a false impression about the total price.

If your menu shows one price, but you add a surcharge without appropriate disclosure, customers may argue they were misled - and that’s where trouble starts.

Pricing clarity is especially important if you’re promoting “specials”, advertising online, or listing prices on delivery platforms. If you’re thinking about how to handle price display lawfully, this guide on advertised price is a helpful reference point.

Be Careful With Policies That Could Look Unfair

Even where a surcharge is disclosed, there’s still a reputational (and sometimes legal) risk if the overall approach looks harsh or confusing - for example, if customers think you’ve “snuck in” an extra fee or applied it selectively.

Clear communication helps you avoid disputes and reduces the chance a customer claims your practice is unfair or misleading. It’s also worth keeping an eye on the line between firm pricing and conduct that could be seen as problematic in a wider consumer protection sense (for example, see unfair business practices).

How Should You Display Public Holiday Surcharges To Customers?

If you want to charge public holiday surcharges, your best protection is simple: make it obvious before the customer commits.

Customers generally don’t mind paying more on a public holiday if they understand it upfront. What triggers complaints is surprise.

Practical Places To Disclose A Public Holiday Surcharge

There’s no single “magic” method, but good practice is to disclose in multiple places so you’re covered across different ordering journeys.

• At the entrance: a sign at the door is one of the clearest ways to notify walk-in customers
• On your menu: include the surcharge statement somewhere visible (not hidden)
• At the counter: signage at the point-of-sale helps for takeaway or fast orders
• Online: if your menu is on your website or socials, note the surcharge there too
• On booking pages: if you take bookings for public holiday seatings, disclose it during the booking process
• On receipts: show the surcharge as a separate line item so it’s transparent

What Should The Wording Say?

Keep the wording plain and direct. For example:

• “A 10% surcharge applies on public holidays.”
• “Public holiday surcharge of 15% applies today.”
• “Public holiday pricing applies.” (Better if you also explain what that means.)

If your surcharge is a percentage, say the percentage. If it only applies to certain items or services, say that clearly too (but be cautious - complicated rules are harder to communicate and easier to get wrong).

Do You Need To Explain Why You’re Charging It?

You don’t necessarily need to justify it legally, but a short, human explanation can reduce friction. Many hospitality businesses add a simple note like “to cover increased staff costs”.

Just make sure any explanation is truthful. If you say it’s “to cover public holiday pay” but you’re not actually paying staff correctly, that can create bigger issues (and not just with customers).

Public Holidays, Staff Pay, And Why Surcharges Don’t Replace Employment Compliance

This is a big one: charging a surcharge doesn’t change your legal obligations to your staff.

Public holidays are heavily regulated in New Zealand, and hospitality businesses often get caught out by misunderstandings around who has to work, what they’re entitled to, and when you can require shifts.

In general, under the Holidays Act 2003 (and depending on whether the day is an otherwise working day for the employee):

• Employees who work on a public holiday may be entitled to time-and-a-half
• They may also be entitled to an alternative holiday (a paid day off later)

Whether you can require someone to work can also depend on what their employment agreement says, rostering practices, and whether it’s a normal working day for them. If you’re unsure about what you can roster, it’s worth reading up on making an employee work a public holiday.

Overtime, Extra Shifts, And Fatigue Management

Public holidays often mean longer shifts and extra coverage. If your team ends up doing overtime (or you rely on a few key people to “carry” the day), make sure your overtime approach is consistent with your employment agreements and your payroll practices.

It’s also a good time to check that you’re handling breaks, fatigue, and pay correctly. This overview on working overtime is useful if you’re building a sustainable staffing plan.

Have Clear Employment Agreements In Place

If you’re running a cafe or restaurant, your staffing model might include full-time employees, part-timers, and casual staff. Public holidays can affect each group differently, so it’s important your employment paperwork is clear and up to date.

Having a properly drafted Employment Contract helps reduce confusion about availability, rostering expectations, pay entitlements, and dispute processes - especially during high-pressure trading periods.

Common Mistakes Cafes And Restaurants Make With Public Holiday Surcharges

Most hospitality businesses aren’t trying to do the wrong thing. The problems usually come from rushed decisions, inconsistent signage, or assumptions like “everyone does it, so it must be fine.”

Here are the most common pitfalls we see with public holiday surcharges - and what you can do instead.

1. Disclosing The Surcharge Too Late

If customers only find out about the surcharge at the very end (for example, when they’re handed the EFTPOS terminal), that’s when complaints escalate.

What to do instead: Put signage at the entrance and on menus so customers know before they order.

2. Inconsistent Information Across Your Menu, Website, And Signs

Your Instagram says “10% public holiday surcharge”, your menu says “15%”, and your POS applies “12.5%”. Even if it’s an honest mistake, customers will feel misled.

What to do instead: Create one source of truth for the surcharge rate and update all customer touchpoints at the same time.

3. Applying The Surcharge In A Way Customers Don’t Expect

For example, applying the surcharge to:

• gift cards
• pre-paid catering orders that were quoted earlier
• already-discounted items (without making it clear)

What to do instead: Keep the surcharge rules simple and transparent. If you need exceptions, communicate them clearly before payment (and ideally before ordering).

4. Confusing A “Service Fee” With A Surcharge

Some businesses add a “service fee”, “weekend fee”, or “staffing charge” without being clear about what it is and when it applies. Customers tend to react more strongly to unclear charges than to a clearly labelled public holiday surcharge.

What to do instead: Use straightforward language and specify exactly when it applies (public holidays only, or weekends too).

5. Not Training Staff On How To Explain The Surcharge

Your front-of-house team will often be the first to get questions like “why is this more expensive today?” If staff sound uncertain or defensive, it can create unnecessary conflict.

What to do instead: Give your team a simple script, such as: “Just a heads up - it’s a public holiday today, so we apply a 10% public holiday surcharge.”

6. Forgetting That Refunds, Returns, And Complaints Still Apply

Even on a public holiday (and even if you disclose the surcharge perfectly), you still need to handle customer complaints and consumer rights correctly.

In particular, customer rights under the Consumer Guarantees Act 1993 (where it applies) don’t disappear because it’s a public holiday - and they can apply to both goods and services in hospitality settings.

If you sell products as well as meals (for example, retail coffee beans, merch, or packaged food), it’s worth having a consistent approach to refunds and exchanges. This guide on returns, refunds and exchanges can help you align your processes with NZ consumer expectations.

Key Takeaways

• Public holiday surcharges are commonly used by NZ cafes and restaurants to help cover increased operating costs, especially wages.
• In general, public holiday surcharges can be legal, but the biggest risk is misleading customers about price - so clear disclosure is essential.
• Disclose your surcharge before customers order where possible, including on menus, signage at the entrance, point-of-sale notices, and online.
• Keep surcharge wording simple and specific (state the percentage and when it applies), and ensure it’s consistent across all customer touchpoints.
• A surcharge doesn’t change your staffing obligations - you still need to comply with public holiday pay rules and have clear employment agreements in place.
• Most disputes happen due to surprise charges or inconsistent messaging, so staff training and a simple process can prevent issues.

If you’d like help setting up your employment documents, reviewing your pricing disclosures, or tightening up your customer-facing terms so you’re protected from day one, you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.