Restaurant surcharges in Australia: the card surcharge ban and what you can still charge

The little line at the bottom of the bill, "1.2% surcharge applies to card payments", has been part of eating out in Australia for years. It is about to disappear. From 1 October 2026, restaurants and cafes can no longer add a card surcharge when a guest pays with eftpos, Mastercard or Visa, whether debit, prepaid or credit. At the same time, the weekend and public holiday surcharge printed on the menu remains perfectly legal, and the penalty-rate economics behind it have not changed at all.

For an operator, that combination raises very practical questions. Where does the card cost go now? Is a Sunday surcharge still allowed, and how must it be displayed? Can a "payment processing fee" replace the old card surcharge? And what about deposits and no-show fees on bookings? This guide answers each one, with the primary sources, so you can reprice with confidence rather than guesswork.

One framing note before the detail: when you can no longer pass costs through as separate line items, every recurring cost you can remove from the P&L matters more. That includes what your booking channel charges you. A booking system with an unlimited free version and 0% commission on covers takes one whole category of per-cover cost off the table, which is exactly the kind of margin protection this new pricing world rewards.

What changed on 1 October 2026

The Reserve Bank of Australia's March 2026 Conclusions Paper on retail payments regulation removed surcharging on the designated card networks. As the RBA's FAQ on the removal of card payment surcharges sets out, from 1 October 2026 businesses can no longer surcharge payments made on eftpos, Mastercard or Visa, across debit, prepaid and credit cards. American Express and PayPal are not formally regulated by the RBA, but both adopted no-surcharge rules voluntarily: Amex aligned with 1 October and PayPal's rule took effect on 5 October 2026.

Two details of the mechanism matter for restaurants:

• The ban is enforced through card network rules, not by the ACCC. The RBA lifted its old prohibition on "no-surcharge" rules, and the networks then banned surcharging in their merchant terms. The ACCC's card surcharges guidance is explicit that the card networks and payment service providers enforce the new rules. In practice, most payment providers simply removed the surcharging function from their terminals around the switchover date.
• Interchange fees were cut on the same day. The RBA's executive summary pairs the surcharge removal with lower interchange caps, which it estimates will reduce wholesale card payment costs for merchants by around $910 million per year. You lose the right to pass the cost on, but the cost itself gets smaller, and from 30 January 2027 large acquirers must disclose how those reductions flowed through to merchant service fees. Watch your monthly statement and renegotiate if the saving does not appear.

The scale of what disappeared is worth stating: the RBA estimated consumers were paying about $1.6 billion a year in card surcharges. That money does not vanish from hospitality economics. It moves into menu prices, absorbed margins, or a mix of both, which is what the rest of this guide is about.

The old regime, for the record

Until 30 September 2026, surcharging was legal but capped: under the excessive surcharge ban, a business could pass on no more than its actual cost of accepting that payment type, and the ACCC enforced it. If you still have "cost of acceptance" signage or a surcharge line configured in an old POS profile, remove it. A card surcharge applied after the ban is a breach of your card network rules, and relabelling it as a vague "payment fee" or "processing fee" is the one move regulators have explicitly warned against: a mandatory fee triggered by paying with a card is a card surcharge whatever you call it, and a mandatory fee that is not in your displayed prices runs into the Australian Consumer Law's pricing rules anyway.

What the ban does not touch: weekend and public holiday surcharges

Here is the part many summaries get wrong: the RBA reform is about card payments only. The Sunday or public holiday surcharge on your menu is a different creature legally, and it remains lawful.

Under Australian Consumer Law section 48, displayed prices must be a single total figure including GST (dine-in food carries 10% GST). Regulation 80A of the Competition and Consumer Regulations 2010 creates a specific carve-out for restaurants and cafes that apply a surcharge on specified days: instead of reprinting every price, the menu may carry the statement "a surcharge of [percentage] applies on [the specified day or days]". Two conditions, both from the ACCC's price display guidance:

• The words must appear on the menu itself, and
• they must be displayed at least as prominently as the most prominent price on the menu.

A footnote in six-point type at the bottom of the dessert page does not qualify. The explanatory statement to the 2013 regulation makes the intent plain: diners must be able to see the surcharge before they order, with no arithmetic surprises when the bill arrives.

Note what the carve-out covers: surcharges tied to specified days. A permanent "service charge" every day of the week gets no such exemption and would need to be built into the displayed prices.

Why the holiday surcharge exists: penalty rates

The public holiday surcharge is not a cash grab, and it helps to be able to explain that to guests. Under the Restaurant Industry Award 2020, permanent staff earn 125% of the base rate on Saturdays, 150% on Sundays and 225% on public holidays, with casuals higher again. Since 30 August 2025, those penalty rates are statutorily protected: the Fair Work Act changes mean award penalty and overtime rates cannot be reduced or traded away in a manner that cuts take-home pay.

So on a public holiday your labour line genuinely costs more than double a weekday's. A 10 to 15% surcharge on those days, disclosed the regulation 80A way, is the honest, legal and widely accepted response. It concentrates the recovery on the exact days the cost occurs instead of quietly padding Tuesday lunch prices, and Australian diners are broadly used to it.

Repricing now the card surcharge is gone

The card cost has not disappeared, only the separate line for it. The Australian Restaurant and Cafe Association put it bluntly when the ban was announced: businesses that do not pass the cost on will see profit drop. Your realistic options:

1. Fold it into menu prices. The blended cost of card acceptance for a small venue typically ran between roughly 0.85% and 2% depending on card mix. With cards at 73% of consumer payments by number, debit alone at 49% and cash down to 15% according to the RBA's 2025 Consumer Payments Survey, nearly every bill carries the cost, so a price rise of around 1% across the menu recovers it with little distortion. On a $28 main, that is about 30 cents. If you are repricing anyway, do it properly rather than mechanically: our guide to restaurant menu pricing covers cost-based and psychological approaches.
2. Lean on the days that cost you most. If your margins were already thin, combining a modest across-the-board adjustment with a correctly displayed weekend or public holiday surcharge targets the recovery where labour costs actually spike.
3. Cut the costs you still control. The interchange reductions should lower your merchant fees; chase them. And audit the per-booking economics of your reservation channel: a marketplace charging a per-cover fee on network bookings is a card-surcharge-sized leak you are allowed to fix. ViteUneTable's free version is unlimited, takes 0% commission and charges no per-booking fee; the Standard pack at 29 € excl. VAT per month adds email reminders and Reserve with Google. Knowing your numbers well enough to make these calls is a discipline of its own; our guide to restaurant profit margins is the place to start.

One thing not to do: invent a new mandatory fee to replace the surcharge. A "venue fee" or "kitchen fee" added at payment is not covered by the regulation 80A carve-out, must be included in displayed prices under ACL section 48, and looks to guests exactly like what it is.

Deposits and no-show fees are not surcharges

The RBA reform says nothing about booking deposits, cancellation fees or no-show fees. Those are not payment surcharges: they are contractual terms of the reservation, agreed before the guest books, and they remain lawful with proper disclosure. A card taken to guarantee a Saturday night table, a per-person deposit on a large function booking, or a disclosed no-show fee all survive 1 October 2026 untouched.

The conditions that make them enforceable, what Consumer Affairs Victoria's guidance says about reasonable amounts, and what Australian diners will actually accept are covered in our dedicated guide to no-show fees for Australian restaurants. The short version: disclose before booking, keep the amount proportionate, and automate the reminders so you rarely need to charge anyone at all.

Frequently asked questions

Are card surcharges illegal in Australia now?

From 1 October 2026, businesses can no longer surcharge payments made with eftpos, Mastercard or Visa cards, covering debit, prepaid and credit. The ban is implemented through RBA standards and card network rules, and payment providers enforce it, typically by removing the surcharging function from terminals. Before that date, surcharging was legal but capped at the cost of acceptance.

Can a restaurant still charge a public holiday surcharge?

Yes. Weekend and public holiday menu surcharges are outside the RBA's card payment rules. Under regulation 80A of the Competition and Consumer Regulations 2010, the menu must state "a surcharge of [percentage] applies on [days]" at least as prominently as the most prominent price on the menu.

Does the ban cover Amex and PayPal?

Not through regulation, but in effect yes. American Express and PayPal are not designated networks, yet both voluntarily adopted no-surcharge rules: Amex from 1 October 2026 and PayPal from 5 October 2026. In practice a restaurant should not surcharge any common payment method.

Can I rename my card surcharge as a service fee or processing fee?

No. A mandatory fee triggered by paying with a card is a card surcharge regardless of its label, and breaches the network rules. A permanent mandatory fee unrelated to card payment must be included in your single displayed GST-inclusive prices under Australian Consumer Law section 48; only specified-day surcharges get the menu-statement exemption.

Are booking deposits and no-show fees affected by the surcharge ban?

No. Deposits, cancellation fees and no-show fees are contractual terms of a reservation, not payment surcharges, and the RBA reform does not touch them. They remain lawful when disclosed clearly before the guest books and kept to a reasonable amount.