Restaurant and Catering Association supports use of surcharges within hospitality sector

With complaints rising among Australians regarding the cost of coffee, particularly during long weekends and on public holidays, the Restaurant and Catering Association (R&CA) has advised of its strong support for the ability of businesses to use surcharges in cafés, restaurants, and catering businesses during such times.

On a long weekend in Sydney expect to pay anywhere from $4.78 to $8 for a cup of coffee, potentially with a surcharge. Public holiday surcharges typically range from 10% to 20%.

John Hart, National President of the Restaurant and Catering Association, has noted that surcharges are a necessary measure to ensure that businesses can continue operating sustainably on days when wage costs are significantly higher.

Hart explained “In recent years, hospitality wage costs have increased by 21%, driven by ongoing rises to the minimum wage and the superannuation guarantee. For small business operators, weekends and public holidays attract penalty rates of up to 250% of base wages. With wages already accounting for around 48% of a venue’s turnover, these higher rates place an extraordinary burden on small businesses.”

Hart explained that without the use of surcharges, many small hospitality operators would face a simple but difficult choice: absorb significant losses, reduce staff, limit trading hours, or shut their doors entirely on key trading days.

Hart advised “Surcharges are a transparent, lawful, and fair practice that enables businesses to compensate for the additional costs of trading. Without them, the viability of many hospitality businesses would be at risk on days when customers want to eat out.”

The Association notes that hospitality owners are already working within some of the tightest margins in the economy, and the pressures from rising wages, increasing compliance obligations, and operational costs have only grown. In this environment, applying a clearly communicated surcharge ensures that businesses can continue to offer employment, service their communities, and contribute to Australia’s economy.

Hart said that hospitality businesses are committed to operating with fairness and transparency, with any surcharges required to be clearly disclosed to customers under Australian Consumer Law.

“We strongly support our members’ right to manage their businesses and ensure their long-term survival responsibly. Applying a surcharge is one of the few tools small businesses have to remain viable while providing services on high-cost days," he added.

The Restaurant & Catering Association will continue to advocate for a practical understanding of the real pressures facing Australia's small hospitality businesses and the critical role they play in the national economy.