Start with the notice. If your award has a shutdown clause, you need to give 28 days' written notice. For a shutdown starting Thursday 24 December, that means it has to reach your staff by Thursday 26 November. Pay runs, leave, public holidays and super all hang off that date.
This is the first Christmas under Payday Super, and the break has three public holidays in eight days. Get the timing or the leave rules wrong and someone is paid late or short right when they're counting on it.
Key dates for 2026-27
The three public holidays are Friday 25 December, Monday 28 December and Friday 1 January. Monday 28 December is a public holiday in every state and territory: Boxing Day in Tasmania, and the extra day for Boxing Day (or Proclamation Day in SA) everywhere else (Fair Work 2026 public holidays).
| Date | Day | What it is | What it means for payroll |
|---|---|---|---|
| 24 Dec 2026 | Thu | Part-day public holiday in Qld (from 6pm), SA and NT (from 7pm) | Evening public holiday rates for staff working in those states |
| 25 Dec 2026 | Fri | Christmas Day | No bank settlement. Not a business day for super |
| 26 Dec 2026 | Sat | Boxing Day (not a public holiday in Tasmania) | Public holiday rates if worked |
| 28 Dec 2026 | Mon | Extra day for Boxing Day (Boxing Day itself in Tasmania) | No bank settlement. Not a business day for super |
| 31 Dec 2026 | Thu | Part-day public holiday in SA and NT (from 7pm) | Evening public holiday rates in those states |
| 1 Jan 2027 | Fri | New Year's Day | No bank settlement. Not a business day for super |
From Thursday 24 December to Monday 4 January there are twelve days and only five working days: the 24th, 29th, 30th and 31st, and the 4th. Any pay day that would normally land on 25 December, 28 December or 1 January has to move, and anything meant to arrive before Christmas has to leave your account earlier than you think. Ask your bank about its bulk payment cut-off for the week of 21 December, because plenty of payroll files still settle overnight rather than instantly.
I'm in WA, and we have no part-day holidays and no Tasmanian twist, so it's the simple version over here. Check your own state's list for regional holidays.
Directing staff to take annual leave
You can only direct staff to take annual leave over the shutdown if their award or enterprise agreement allows it. For award- and agreement-free staff, the direction has to be reasonable (Fair Work Ombudsman). So work out which instrument covers each person first. You know your award by now, don't you?
Award-covered staff. Since 1 May 2023, 78 modern awards have used a standard shutdown clause, including the Clerks, General Retail, Hospitality, Manufacturing, Professional Employees and Building and Construction awards (HRD summary of the Fair Work Commission changes). Under that clause:
- you must give 28 days' written notice of the shutdown, unless a shorter period is agreed with the majority of the affected employees (do the maths, because we're already into November)
- the direction must be reasonable and in writing
- you can only direct staff to use leave they have already accrued
- staff who start after the notice goes out must be told as soon as reasonably practicable
A few awards keep a longer notice period of their own, so check yours before you lean on the 28 days.
Agreement-covered staff. Your enterprise agreement's shutdown clause applies. If you don't have a copy to hand, the Fair Work Commission has a free Find an agreement database.
Award- and agreement-free staff. You can require leave if the requirement is reasonable. There's no fixed notice period, but a direction issued at the last minute is unlikely to be seen as reasonable. I like to give three pay days' notice, because families budget around their pay.
Working back 28 days from Thursday 24 December gives you Thursday 26 November. Send it this week if you can, so you have time to sort out anyone who doesn't have enough leave.
Public holidays inside the shutdown
A public holiday that falls during paid annual leave is paid as a public holiday, and it doesn't come off the leave balance (Fair Work Ombudsman). This is the most common shutdown payroll error I see, because plenty of systems deduct leave for every weekday in the period unless the holidays are set up properly.
How each group is paid for 25 December, 28 December and 1 January:
| Employee situation | Pay for the public holiday | Leave deducted? |
|---|---|---|
| Full-time or part-time, on paid annual leave, normally works that day | Base rate for ordinary hours | No |
| Full-time or part-time, normally works that day, business closed | Base rate for ordinary hours | No |
| Full-time or part-time, on unpaid leave over the shutdown | Depends on the award, the circumstances and any agreement | Not applicable |
| Part-time who doesn't normally work that day | Nothing | Not applicable |
| Casual, not rostered | Nothing | Not applicable |
| Anyone who works the day | Public holiday penalty rates under their award or agreement | No |
Worked example. A full-time employee works Monday to Friday and the business closes from Thursday 24 December, reopening Monday 4 January. That's seven weekdays off: 24, 25, 28, 29, 30 and 31 December, and 1 January. Only four come off their annual leave balance. The other three are paid public holidays.
The public holiday base rate leaves out loadings, allowances, penalty rates and bonuses. Annual leave pay, on the other hand, may include leave loading if the award or contract provides it. Have I mentioned the award enough yet?
Bringing pay runs forward
Process every pay period that falls inside the shutdown as its own pay run, with its own period dates, before you close. That keeps tax, super and leave accruals right for each period and makes your STP data easy to reconcile.
You have two options:
- Pay on the normal schedule, processed early. Prepare the runs before you leave and set the bank file to pay on each normal pay day, or the last business day before it if that day is a public holiday. Staff get paid as usual and nobody faces a long gap in January.
- Pay the shutdown periods in advance. Pay two or more periods in one go before Christmas. Staff get more cash up front but wait a long time for the first pay after they return, so put the date in your shutdown notice.
Tax on advance payments. When annual leave covering more than one pay period is paid in advance, the ATO's method is to average the payment across the periods, work out the withholding on that average, then multiply it back up. Any leave loading goes into the total (ATO: withholding from leave payments). Taxing a two-week advance as one big weekly pay over-withholds, and staff notice. Don't overcook this. Most Australian payroll software handles it if the run is set up as a multiple-period pay run, so check yours does.
STP reporting. Your STP report is due on or before pay day, and pay day is the payment date on the bank transaction (ATO: rules of reporting through STP). If you prepare runs early for future-dated payment, lodge each pay event before you leave the office.
Bank timing. Bulk direct-entry payments don't settle on weekends or national public holidays. A file sent on Thursday 24 December after the cut-off may not reach accounts until Tuesday 29 December. Check the date on your bank file and make sure it's the day before a public holiday.
Super under Payday Super
Since 1 July 2026, the super guarantee for each pay day has to be received by the employee's fund within 7 business days, instead of by the quarterly deadline. Late contributions attract the super guarantee charge (ATO: payment deadlines). Three rules matter most over the break:
- Public holidays stretch the deadline, but not by much. A business day excludes weekends and any day that's a public holiday for a whole state or territory, even if it isn't a holiday where you are. 25 December, 28 December and 1 January are all non-business days. The part-day holidays on 24 and 31 December still count as business days.
- The deadline runs from the day you pay, not the period worked. Paying shutdown wages early brings the super due date forward too. I'd pay the super before you leave the office as well, but we're all new to this.
- Separate advance payments are out-of-cycle. The ATO treats bonuses and payments made in advance as out-of-cycle, and super on them is due 7 business days after your next regular pay day. A Christmas bonus paid on its own follows the same rule.
Worked due dates for 2026, counting business days the way the ATO does:
| Pay day | Super must reach the fund by |
|---|---|
| Thursday 17 December 2026 | Wednesday 30 December 2026 |
| Monday 21 December 2026 | Monday 4 January 2027 |
| Wednesday 23 December 2026 | Wednesday 6 January 2027 |
| Thursday 24 December 2026 | Thursday 7 January 2027 |
The deadline is the day the fund receives the money, and clearing houses slow down or close over Christmas. From 1 July 2026, payroll systems and clearing houses can use the New Payments Platform for same-day delivery, but not every provider does yet. So pay super in the same run as wages, before you shut.
Staff without enough leave, casuals and anyone still working
Not enough accrued leave. Under the standard award clause you can't direct someone to take leave they haven't accrued. You can agree with them in writing to unpaid leave, or to annual leave in advance. An exchange of emails or texts can count as the written agreement for unpaid leave.
In payroll, record advance leave so the balance can go negative and is recovered by future accruals. If the employee resigns before it's earned back, check the written agreement first, because any deduction from final pay has to be authorised. That recovery headache is why I'd rather agree unpaid leave in the first place.
Casuals. Casuals don't accrue paid annual leave, so there's nothing to direct. If they aren't rostered, they aren't paid, including for public holidays they wouldn't have worked. Give them the shutdown dates early so they can plan.
Staff who keep working. Anyone rostered over the break is paid normally, with public holiday penalty rates under their award or agreement for work on 25 December, 26 December, 28 December or 1 January. The Christmas Eve and New Year's Eve evening part-days in Queensland, South Australia and the Northern Territory also attract public holiday rates for award-covered roles. Those shifts need to make it into a pay run, because timesheets submitted after you close often sit untouched until mid-January. If that's likely, put it in writing that you'll pay base hours and adjust the first pay after the break.
Shutdown payroll checklist
By 26 November
- Confirm the shutdown dates and which teams they cover
- Check the shutdown clause and notice period in each award or agreement you use
- Run a leave report and find anyone who won't have enough leave accrued by 24 December
- Send written shutdown directions, at least 28 days before the shutdown starts (so by Thursday 26 November, and earlier is kinder)
- Agree unpaid leave or leave in advance, in writing, with anyone short on leave
Early December
- Confirm 25 December, 28 December and 1 January are set up in your payroll system so they aren't deducted as leave
- Decide whether you're paying on the normal schedule or in advance, and tell staff the dates of their last pay before the break and first pay after it
- Check your bank's cut-off times and your clearing house's holiday processing dates
- Collect rosters for anyone working over the break, including public holiday shifts
Last week before close
- Process each shutdown pay period as its own run, with the correct period dates
- Check tax on any advance leave payments uses the averaging method
- Lodge each STP pay event
- Pay super in the same run as wages
- Note who to contact for urgent pay issues while the office is closed
First week back
- Process timesheets for anyone who worked over the break
- Check leave balances were reduced correctly and public holidays weren't deducted
- Confirm every super contribution was received on time
Quick FAQs
Can I make my staff take annual leave over Christmas?
Only if their award or enterprise agreement allows it, and under the standard award clause the direction has to be reasonable, in writing and given with 28 days' notice. Award- and agreement-free staff can be required to take leave if the requirement is reasonable.
What if someone hasn't got enough annual leave to cover the shutdown?
You can't direct them to take leave they haven't accrued. You can agree in writing to unpaid leave or annual leave in advance. If they say no, the options are letting them work, using any time off in lieu they've built up, or getting advice about a stand down.
Do public holidays come out of annual leave during a shutdown?
No. A public holiday that falls inside a period of paid annual leave is paid as a public holiday and shouldn't reduce the leave balance. Check your payroll software, because many systems deduct it anyway until the holidays are set up.
When is super due if I pay wages early?
Within 7 business days of the day you actually pay, and 25 December, 28 December and 1 January don't count as business days. Paying wages on 17 December means super is due by 30 December. If a payment is out-of-cycle, super is due 7 business days after your next regular pay day.
Get the notice out before 26 November
Christmas payroll gets decided in November. Send the shutdown notice, set the public holidays up properly, run each period as its own pay run, and pay super with wages before you close. Your team gets paid on time and you get a quiet break.
If you'd like a second set of eyes on your shutdown pay runs before you close, ask me.
This article is general information about Australian rules as at November 2026, not legal or tax advice. Awards, agreements and contracts vary, so check the instruments that cover your staff, or contact the Fair Work Ombudsman on 13 13 94 or a qualified adviser.
Sources
Fair Work Ombudsman: 2026 public holidays
Fair Work Ombudsman: direction to take annual leave during a shutdown
Fair Work Ombudsman: not working on public holidays
HRD: shutting down over the Christmas and New Year period
ATO: payment deadlines for Payday Super
ATO: withholding from leave payments for continuing employees
ATO: rules of reporting through STP
