Alex is Sprintlaw's co-founder and principal lawyer. Alex previously worked at a top-tier firm as a lawyer specialising in technology and media contracts, and founded a digital agency which he sold in 2015.
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Public holidays can be great for trade (hello, long-weekend crowds) - but they can also be expensive to staff and operate. That’s why many cafes, restaurants, bars, salons and service businesses consider adding a public holiday surcharge.
If you’re a small business owner, you’re probably asking the practical questions:
- Is charging a public holiday surcharge actually legal in New Zealand?
- How much can you charge without getting in trouble?
- What do you need to tell customers (and when)?
- How does this interact with your staff’s public holiday entitlements?
We’ll break it down in plain English, from a business owner’s perspective, so you can charge with confidence and avoid the compliance headaches. This article is general information only and isn’t legal advice.
What Is A Public Holiday Surcharge (And Why Do Businesses Use It)?
A public holiday surcharge is an extra percentage (or fixed amount) added to a customer’s bill when they purchase goods or services on a public holiday.
It’s most common in hospitality, but it can apply anywhere you’re selling to the public on a day where operating costs jump - for example, a:
- cafe or restaurant
- bar
- bakery
- hairdresser or beauty salon
- tour operator
- retail store open on public holidays
The usual reason is simple: in many cases, staff working on a public holiday are entitled to time-and-a-half pay (and may be entitled to an alternative holiday as well). If you open your doors, your wage bill can jump significantly.
A surcharge can help you recover some of those additional costs without permanently raising your prices across the board.
But - and this is the key - the surcharge only works if you’re transparent and comply with consumer law.
Are Public Holiday Surcharges Legal In New Zealand?
In most cases, yes - a public holiday surcharge can be legal in NZ.
There isn’t a single “public holiday surcharge law” that sets a standard rate or bans the practice. Instead, the legality comes down to whether your pricing and communications comply with general consumer protection rules, particularly the Fair Trading Act 1986.
As a business, your big compliance focus is: don’t mislead customers about the price they’ll pay.
Why The Fair Trading Act Matters
The Fair Trading Act 1986 prohibits misleading or deceptive conduct in trade, including around pricing. Practically, this means:
- If you advertise a price, customers shouldn’t get a nasty surprise at the counter.
- If a surcharge applies, it should be disclosed clearly and early enough that customers can make an informed choice.
- Your staff should apply it consistently (and be able to explain it politely).
This is the same general pricing principle you’ll see across consumer-facing businesses - whether you’re advertising menu items, online services, or booking fees. If you want a deeper reference point for pricing expectations, the advertised price rules are a helpful benchmark for how transparency is assessed.
What About The Consumer Guarantees Act?
The Consumer Guarantees Act 1993 is mainly about the quality of goods and services (for example, that services are carried out with reasonable care and skill). It doesn’t specifically regulate surcharges.
That said, it can still matter in the broader customer relationship - particularly if a dispute involves the overall transaction (for example, what was agreed and what was delivered). The safest approach is to keep your customer communications clean, accurate and consistent so pricing issues don’t become part of a bigger complaint.
How Much Can You Charge As A Public Holiday Surcharge?
One of the most searched questions here is basically: “What’s the maximum public holiday surcharge in NZ?”
There isn’t a legislated maximum percentage that applies across all industries. That said, “no cap” doesn’t mean “charge whatever you want”. You still need to stay on the right side of fairness and transparency.
A Practical Approach To Setting Your Surcharge
When deciding your public holiday surcharge, it helps to be able to explain the logic internally (and ideally, to customers if asked). A common approach is to estimate the genuine increase in operating costs for that day.
For example, consider:
- Wages: time-and-a-half for eligible employees working the public holiday
- Alternative holiday liability: if the day would otherwise be a working day for the employee, they may also become entitled to an alternative paid day off
- Penalty rates / allowances under your employment agreements (if any)
- Supplier surcharges (some suppliers charge more on public holidays)
- Higher waste/spoilage if demand is unpredictable
From there, you can decide whether a percentage surcharge (for example, X%) is the cleanest way to recover costs, or whether you’d rather build public holiday costs into overall pricing (and avoid surcharges altogether).
Be Consistent And Specific
If you choose to charge a public holiday surcharge, decide:
- Which days it applies to (all NZ public holidays? only certain ones?)
- Whether it applies to all items, or only certain services
- Whether it applies to dine-in only, takeaway only, or both
- Whether it applies to online orders and pre-orders
Inconsistency is where trouble starts - especially if different staff apply the surcharge differently, or customers see different messages depending on where they look (menu vs website vs signage).
How Do You Disclose A Public Holiday Surcharge So You Stay Compliant?
In practice, the biggest compliance risk isn’t the existence of the surcharge - it’s poor disclosure.
To stay compliant, your goal is: make sure a reasonable customer would notice the surcharge before they commit to buying.
Where To Show The Surcharge (In Real-World Terms)
Here are common, sensible places to disclose a public holiday surcharge:
- At the entrance (a clear sign before customers order)
- At the point of sale (counter signage)
- On menus (printed menus and digital menus)
- On ordering pages (online ordering / booking flows)
- On receipts (show the surcharge line item clearly)
If your business takes bookings, you should also consider including it in your booking confirmation or booking terms - particularly if you take deposits or prepayments.
For businesses that sell online, it’s worth making sure your Website Terms and Conditions and checkout flow reflect how pricing is calculated on public holidays, especially where orders can be placed on a public holiday for same-day fulfilment.
If you run a dedicated online store, your E-Commerce Terms and Conditions can also help you clearly set out how pricing, delivery and fees work in different scenarios (including public holidays).
Use Simple Wording (And Avoid Fine Print)
Your surcharge notice should be short, readable, and specific. For example:
- “A 15% public holiday surcharge applies today.”
- “Public Holiday Surcharge: 10% applies on all NZ public holidays.”
Avoid hiding the surcharge in dense paragraphs or tiny font. If customers feel tricked, that’s where complaints (and reputational damage) happen - even if you technically “mentioned it somewhere”.
Make Sure Your Team Can Explain It
Even the best sign won’t prevent every question. Make sure your staff have a consistent, calm explanation ready, such as:
“We apply a public holiday surcharge to help cover the increased costs of operating today, including higher wage rates.”
This is also a good moment to ensure your internal policies and training are aligned - especially if you have multiple sites, casual staff, or shift managers making day-to-day decisions.
What About Staff Pay And Public Holidays? (Don’t Try To Use The Surcharge To “Cover” Your Obligations)
This is where some businesses accidentally step into danger.
A public holiday surcharge is a pricing decision. It does not change your obligations to staff under employment law, including the Holidays Act 2003.
Even if you charge a surcharge and it fully covers your wage costs (great!), you still need to calculate and pay staff correctly.
Public Holiday Pay Basics (In Plain English)
While the detail can get technical depending on work patterns, rosters and what “otherwise working day” means, the general framework is:
- If an employee works on a public holiday that would otherwise be a working day for them, they’re generally entitled to time-and-a-half for the hours worked.
- They may also be entitled to an alternative holiday (a paid day off to take later).
If you’re planning to open on a public holiday, it’s worth making sure your agreements and processes are clear on expectations for working those days. Your Employment Contract is usually the starting point for setting out hours, rosters, and how public holiday work is managed.
And if you’re wondering about whether staff can be required to work those days, it’s important to get it right upfront - public holiday work rules can be more nuanced than many business owners expect.
Overtime, Rosters And “Busy Day” Expectations
Public holidays often mean longer trading hours and unexpected rushes. If your team ends up doing longer shifts, you’ll also want to ensure your approach to overtime is compliant and consistent with your employment documentation and payroll processes.
Many businesses use a quick internal guide for managers, aligned with employment agreements, to keep things consistent. If overtime becomes a regular feature, it can be worth checking your approach against a working overtime compliance framework, so you don’t accidentally drift into underpayment or record-keeping issues.
Don’t “Swap” Staff Entitlements For A Surcharge
Sometimes we see businesses try to justify shortcuts like:
- not paying time-and-a-half because “customers paid a surcharge”
- not providing alternative holidays because “the shift was short”
- calling it a “cash bonus” arrangement without proper payroll recording
Those approaches can create legal risk quickly. If you’re unsure how public holiday rules apply to your specific roster patterns, getting tailored advice early can save you a messy dispute later.
Common Compliance Mistakes With Public Holiday Surcharges (And How To Avoid Them)
Most public holiday surcharge problems are avoidable. They usually come down to communication gaps, inconsistent systems, or “we’ve always done it this way” habits.
1. Advertising One Price But Charging Another
If your menu says $20 and your customer pays $23 after a 15% surcharge, the question becomes: did they know that would happen before ordering?
This is why your signage and menu disclosure matters so much. The advertised price principles are a useful reality check here - your customer should not be misled about what they’ll pay.
2. Not Updating Digital Menus, Booking Platforms Or Online Stores
Plenty of customers don’t see your front-door sign because they order online, book ahead, or view a menu on their phone.
Do a quick “customer journey” test:
- Can a customer order without ever seeing the surcharge notice?
- Is the surcharge disclosed before they click “pay now”?
- Does the receipt clearly itemise it?
If you sell online or take bookings, your customer-facing terms should back up your pricing structure. For many businesses, that means making sure your Website Terms and Conditions (and/or your E-Commerce Terms and Conditions) match what you actually do in practice.
3. Applying The Surcharge Inconsistently
Inconsistency can look like:
- one staff member applies the surcharge, another forgets
- the surcharge is applied to dine-in but not takeaway (without disclosure)
- the surcharge is applied at one location but not another
This isn’t just a financial issue - it’s a fairness and complaints issue. Write down your rules, train your team, and make sure your POS system is set up correctly.
4. Confusing “Public Holiday Surcharge” With Other Surcharges
Some businesses charge other fees too (for example, card payment fees). If you stack surcharges, the transparency bar is even higher.
If you do charge multiple surcharges, keep them clearly separated and explained, so customers can understand what they’re paying for and why.
5. Using DIY Signage Or Terms That Don’t Match Your Actual Practice
This one’s more common than you’d think: a business reuses an old sign (“10% surcharge”) but the POS has been updated to 15%, or the surcharge applies on some public holidays but not others.
Do a quick audit before each public holiday:
- signage matches the POS setting
- menus (printed and digital) match signage
- online ordering pages disclose the surcharge
- staff know the surcharge rate and how to explain it
It’s a small admin job that can prevent a big headache.
Key Takeaways
- A public holiday surcharge is generally legal in New Zealand, but it needs to be handled transparently so customers aren’t misled.
- Your main compliance focus is the Fair Trading Act 1986 - make sure your pricing and advertising are clear and accurate.
- There’s no one “set” surcharge rate in NZ, but you should choose a surcharge you can justify and apply consistently.
- Disclose the surcharge clearly before purchase (signage, menus, online ordering and receipts), not buried in fine print.
- A surcharge doesn’t change your obligations to staff under the Holidays Act 2003 - you still need to pay public holiday entitlements correctly.
- Align your systems and documents (like your Employment Contract and online terms) with what you actually do in practice.
If you’d like help reviewing your pricing disclosures, customer terms, or employment setup for public holidays, reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.
