Labour is the single biggest line in almost every Australian venue's budget — wages run at nearly 28% of turnover, and almost 30% of hospitality businesses made a loss in 2023–24 (Restaurant & Catering Australia, 2024). So when you work out what a shift, a roster or a menu price needs to cover, the number that matters isn't the hourly rate on the award. It's the fully-loaded cost: base rate, casual loading, penalty multipliers, super and the on-costs most owners forget until the bill lands. This guide builds that number up from the floor, with a worked example you can run against your own roster — and flags the two changes that both hit on 1 July 2026.
Key takeaways
- The award floor is $26.44 an hour from 1 July 2026. The Fair Work Commission lifted modern award minimum wages by 4.75%, and the lowest ongoing award rate now sits at $1,004.90 a week, or $26.44 an hour (Fair Work Ombudsman, 2026).
- That $26.44 really costs you about $37 an hour for a weekday casual once the 25% casual loading and 12% super are added — and roughly $74 an hour on a public holiday.
- Super is now 12% of ordinary time earnings, the final scheduled increase, in force since 1 July 2025 (ATO, 2025).
- Payday Super starts 1 July 2026. You must pay super every payday, not quarterly, and it has to reach the fund within 7 business days (Fair Work Ombudsman, 2026). The quarterly gap many venues used as informal working capital is gone.
- Penalty rates are multipliers, not extras. Under the Restaurant Industry Award, full-time and part-time staff earn 125% on Saturday, 150% on Sunday and 225% on a public holiday — exactly when most venues trade hardest.
How much does one restaurant employee actually cost?
Start with the visible number and build up. From the first full pay period on or after 1 July 2026, the lowest ongoing rate in the modern award system is $26.44 an hour (Fair Work Ombudsman, 2026). That is what an entry-level food and beverage attendant looks like on paper.
It is not what they cost you. A casual must be paid "a loading of 25% in addition to the minimum hourly rate" for every hour worked (Restaurant Industry Award 2020, MA000119). On top of the wage, you owe superannuation at 12% of ordinary time earnings (ATO, 2025). Stack those on the floor rate and a single weekday hour looks like this:
- Award floor: $26.44
- Plus 25% casual loading: $33.05
- Plus 12% super: $37.02
So the "$26.44 employee" costs you about $37 an hour before they've worked a single weekend shift — and before workers' compensation, payroll tax, uniforms or rostering time. That gap between the rate you quote and the cost you carry is the whole point of this article.
What changed on 1 July 2026 (two hits, same day)
Two separate changes land together, and both raise the cost of staff.
1. The 4.75% award rise. The Fair Work Commission announced its 2026 Annual Wage Review decision on 2 June 2026 (Fair Work Commission, 2026). Modern award minimum wages rose 4.75%, with the lowest ongoing rate set at $26.44 an hour, up from the previous $24.95 (Fair Work Ombudsman, 2026). Because penalty rates are a percentage of that base, every weekend and public-holiday hour rises by 4.75% as well — the increase compounds through exactly the hours restaurants trade.
2. Payday Super. From 1 July 2026 you must pay super at the same time as wages, and the contribution has to reach the employee's fund within 7 business days of payday — 20 business days for a new employee's first contribution (Fair Work Ombudsman, 2026). The dollar amount of super doesn't change, but the timing does, and that is a cash-flow shock for thin-margin venues (more on that below).
This isn't landing on a healthy sector. Job vacancies hit 337,900 in February 2026 — the highest since November 2024 — with accommodation and food services named among the drivers (ABS, 2026). Staff are scarce and getting dearer at the same time.
Casual loading vs penalty rates: don't confuse the two
These are different things and they stack.
The 25% casual loading is paid for every hour a casual works, in place of paid annual leave, sick leave and notice (Restaurant Industry Award 2020, MA000119). It is the trade-off: casuals cost more per hour, permanents cost more in entitlements.
Penalty rates are paid on top, for when the hour is worked. Under the Restaurant Industry Award, full-time and part-time staff earn 125% on Saturday, 150% on Sunday and 225% on a public holiday; casual rates run higher because the loading is built into the figure — 150% on Saturday and Sunday and 250% on a public holiday for entry-level casuals (AHA Victoria, 2025). The exact multipliers vary by classification and employment type, so confirm yours before you build a rate — our guide to how to apply penalty rates correctly walks through each one.
A worked example: the real cost of a weekend casual
Take one entry-level casual food and beverage attendant on the $26.44 floor, and follow the cost across the week. The figures below are casual rates — the 25% loading is already built into each multiplier — times the floor rate, plus 12% super on top:
| When they work | Wage rate | + 12% super | Real cost/hour |
|---|---|---|---|
| Weekday (ordinary) | $33.05 | $37.02 | $37.02 |
| Saturday (150% casual) | $39.66 | $44.42 | $44.42 |
| Sunday (150% casual) | $39.66 | $44.42 | $44.42 |
| Public holiday (250% casual) | $66.10 | $74.03 | $74.03 |
Now roster that person for a realistic week — say two weekday evenings (8 hours), a Saturday (6 hours) and a Sunday (6 hours), 20 hours total:
- 8 weekday hours × $37.02 = $296.16
- 6 Saturday hours × $44.42 = $266.52
- 6 Sunday hours × $44.42 = $266.52
- Weekly cost: about $829 for 20 hours of work
That's an effective $41.45 an hour across the week — not the $26.44 the award rate suggests. Roster four casuals on a similar pattern and you're carrying roughly $3,300 a week in wages and super alone, before a single public holiday. Build your menu prices and your roster against the real number, not the floor.
The on-costs most owners forget
The hourly cost above still isn't the whole bill. Budget for these too:
- Workers' compensation insurance. Premiums are state-based and hospitality sits in a higher-risk band; the cost scales with your total wages, so it rises every time the award does.
- Payroll tax. State-based and only payable above a wages threshold. Most single-venue independents fall under it, but multi-venue operators can tip over — check your state's threshold before you assume you're exempt.
- Permanent-staff entitlements. Full-timers and part-timers don't carry the 25% loading, but they accrue paid annual leave, personal/carer's leave and notice — real costs that don't show on a timesheet.
- Turnover and training. Recruitment, onboarding and the productivity dip while someone learns the pass are a genuine cost in a market with 337,900 vacancies (ABS, 2026).
As a sense-check, the ATO's small-business benchmarks put labour at roughly 23–33% of turnover for catering and food-service businesses turning over more than $600,000 (ATO, 2024). If yours is well above that band, the problem is usually rostering, not pay rates.
Payday Super: the cash-flow change to plan for now
The amount of super you owe isn't changing — it's still 12%. What changes on 1 July 2026 is when it leaves your account. Under the old rules you paid super at least quarterly; under Payday Super it must reach the fund within 7 business days of every pay run (ATO, 2026).
For a venue that has been using the quarterly gap as informal working capital — holding super on the books for weeks before remitting it — that buffer disappears overnight. From your first July pay run, roughly 12% of your wage bill leaves the business every fortnight or week instead of every quarter. Map your cash flow against that change before it bites: late contributions trigger the super guarantee charge, which adds daily-compounding interest plus penalties on top of the super you already owed (ATO, 2026).
How to control the cost without underpaying
You can't avoid the award, and you shouldn't try — intentional underpayment is now a criminal offence. But you can manage the cost honestly:
- Roster to demand, not habit. The single biggest lever is hours, not rates. Cut the over-staffed Tuesday before you touch a weekend you actually need.
- Cross-train. A smaller team that can cover the pass, the floor and the till runs more hours productively and leans less on expensive penalty cover.
- Watch the public-holiday maths. At roughly $74 an hour for a casual, a quiet public holiday can lose money open. Decide deliberately, don't default.
- Audit your other fixed costs in the same sitting. The 1 July wage rise lands alongside other 2026 cost changes — work through the card-surcharge ban checklist while you're re-pricing, so the whole cost base moves together.
- Keep more of each sale. Every dollar lost to a delivery-app commission of around 30% is a dollar that can't cover wages. Taking even some orders through your own website or ordering page — rather than handing what Uber Eats and DoorDash really cost to an aggregator — puts more of each order back toward the labour bill. A simple owned site costs less than one delivery-app commission a week, and DineHere builds one from a menu photo in about ten minutes.
Labour is the line that only goes up. For the full picture of where every dollar in your venue goes — wages, energy, rent, commissions and fees — start with the cost-breakdown pillar and work back to the levers you control.
Frequently asked questions
How much do restaurant staff actually cost in Australia in 2026?
More than the award rate suggests. The $26.44 floor becomes about $37 an hour for a weekday casual once you add the 25% casual loading and 12% super, and roughly $44 on a weekend or $74 on a public holiday — before workers' compensation, payroll tax and on-costs.
What is the minimum hourly wage for restaurant staff from 1 July 2026?
The lowest ongoing modern-award rate is $26.44 an hour, or $1,004.90 a week, after the Fair Work Commission's 4.75% increase (Fair Work Ombudsman, 2026). Many classifications sit above this; it's a floor, not the rate for every role.
How much is the casual loading?
25% of the minimum hourly rate, paid for every hour a casual works, in place of paid leave and notice (Restaurant Industry Award 2020, MA000119).
What are the weekend and public-holiday penalty rates?
Under the Restaurant Industry Award, full-time and part-time staff earn 125% on Saturday, 150% on Sunday and 225% on a public holiday. Casual rates are higher because the 25% loading is built in — typically 150% on weekends and 250% on a public holiday for entry-level casuals (AHA Victoria, 2025).
How much super do I have to pay?
12% of ordinary time earnings. This took effect on 1 July 2025 and is the final scheduled increase (ATO, 2025).
What is Payday Super and when does it start?
From 1 July 2026 you must pay super at the same time as wages, with the contribution reaching the fund within 7 business days of payday (20 business days for a new employee's first payment) (Fair Work Ombudsman, 2026).
Are casuals cheaper than permanent staff?
Per hour, no — the 25% loading makes them dearer. But you don't pay them for leave or notice, and you can flex hours to demand. Permanents cost less per hour but carry accrued leave entitlements. The right mix depends on how predictable your trade is.
What on-costs am I missing beyond wages and super?
Workers' compensation insurance, payroll tax (state-based, above a threshold), paid leave for permanents, plus recruitment and training. Each scales with your wage bill, so they all rise when the award does.
What percentage of turnover should labour be?
The ATO's catering benchmarks put labour at roughly 23–33% of turnover for businesses over $600,000 (ATO, 2024), and Restaurant & Catering Australia found wages running at nearly 28% across the sector (Restaurant & Catering Australia, 2024). Well above that usually points to rostering.
Does the 4.75% rise mean staff cost me exactly 4.75% more?
No — more in dollar terms. Because penalty rates and super are percentages of the base, the rise compounds through every weekend, public-holiday and overtime hour, plus 12% super on the lot.
How do I cut labour cost without breaking the award?
Roster to demand, cross-train so fewer people cover more, decide public-holiday trading deliberately, and protect revenue per cover — including keeping more orders off high-commission delivery apps. You manage hours and revenue, never the lawful rate.
