The eye-watering cost of eating out on Australia Day revealed

The cost of visiting a cafe, bar or restaurant will cost Australians millions of dollars in unwanted fees as business costs soar.

Research prepared specifically for NewsWire projects by financial comparison platform money.com.au has revealed that Australians will pay an additional $26.7 million in public holiday surcharges.

There are no additional charges customers can pay, although the Australian Competition and Consumer Commission requires businesses to display these prices on their menus.

The costs were based on public surcharge estimates using ABS retail data for cafes, restaurants and takeaways, based on Australians spending $204.8 million on Australia Day with an average surcharge of 15 per cent.

In total, Australians are expected to lose $5.58 billion during January.

Money.com.au’s financial expert Sean Callery says public holidays can feel like an extra tax on dining out, and Australians should take this into consideration before heading out.

“This is not an insignificant extra cost and the important thing is to be prepared and if in doubt ask a member of staff how much they charge so you can make an informed decision,” Mr Callery said.

“The most important thing is to understand what the additional cost impacts might be.

“If you’re going out for a coffee, which usually costs $7, you’ll potentially pay $8 on (Australia Day); if you’re taking the family out for brunch, which usually costs a $100 bill, it’ll be up to $115.”

High labor, low margin industry

Australian Restaurant and Cafe Association chief executive Wes Lambert says although it can be a pain point for some consumers, trading on public holidays is often a “labor of love”.

“Small businesses across Australia – including the hospitality sector – are required to pay punitive rates under the Fair Work Act and modern awards,” Mr Lambert said.

“In many cases, they are going to lose tremendous amounts of money if they can’t pass on these increased fees.”

Businesses began adding hefty surcharges to stay open on a public holiday.

Wages typically increase by 225 to 250 percent hourly, depending on whether the staff is permanent or temporary; Many small businesses use surcharges as a way to recoup these funds.

Mr Lambert says many cafes and restaurants in Australia are breaking even or losing money despite the holiday surcharge.

“Usually wage costs are 30 to 40 percent of (the average cafe’s) revenue,” he said.

“Now imagine if wages increased by 250 percent. That means they would go from 30 to 75, or from 40 to 100 percent.

“It’s not a matter of whether it’s reasonable or not. It’s just that there are certain industries that have very high labor and low profit margins, hospitality being one of them.”

“According to IBIS World, restaurants and cafes will make less than 3 per cent profit in 2026, so we cannot afford bank holiday penalty rates.”

Mr Callery agrees, saying it’s a difficult decision for businesses to make.

“It basically depends on the accommodation venues and their owners deciding whether it is worth charging extra,” Mr Callery said.

“If they are going to have a busier day on Monday because they have more work to do, they may decide to cover the cost of additional staff and charge their normal rates.

“But if the additional turnover does not cover the personnel costs, then the additional fee becomes almost mandatory.”

Mr Callery says this is a challenge for businesses as the day is full of uncertainty and businesses are unsure if they will be able to get an increase in customers over the holiday period.