Payroll funding: keeping wages and super on time when cash runs thin

Staff are the one bill you cannot negotiate with a shrug. Rent can be talked about, suppliers can be asked for a week, but a team that is paid late loses trust fast, and the law has views too. That is why payroll sits at the top of most owners’ worry lists when cash is tight.

Why does payroll cause cash-flow trouble?

Because wages are certain and revenue is not. A typical pattern: you do the work, invoice the customer, and wait 30 days. Meanwhile your people are paid every week or fortnight. The longer the wait, the more payroll you have fronted.

On top of net wages, three things are due:

• PAYG withholding. Tax withheld from wages, which you hold on trust for the ATO and report to them.
• Super. Superannuation guarantee contributions for eligible workers. Business.gov.au gives the standard rate as 12 per cent of qualifying earnings.
• Payroll tax, in states and territories where your wages exceed the threshold. Thresholds and rates differ across jurisdictions, and each state revenue office publishes its own.

The ATO’s page on PAYG withholding says employers must work out how much tax to withhold, track those amounts and report them to the ATO.

What does payday super change?

According to the ATO, Payday Super is the new way employers calculate, pay and report super guarantee, applying from 1 July 2026. Under it, super is paid alongside wages instead of once a quarter. Quarterly rules still applied to pay periods up to 30 June 2026.

For cash flow, the effect is straightforward. Under the old rhythm, super built up in your account for weeks before leaving. Under payday super, it leaves every pay run. That removes a cushion some owners had unknowingly relied on and makes each pay cycle a bit heavier. If your payroll cash was already thin, it will feel thinner.

Business.gov.au also says to expect super payments to be made through SuperStream-compliant methods, to be reported to the ATO, and to be recorded for at least five years.

How much payroll buffer do I need?

A useful rule of thumb is to ask how many pay runs you could meet if no customer paid for the next few weeks. Add up one pay run’s total cost (net wages, PAYG withholding and super), multiply by the number of runs in your customers’ typical payment window, and compare it with the cash you hold.

As an illustration, with no real business involved: a team costing $18,000 per fortnight, with customers who pay in about 30 days, has two to three pay runs of money in flight at any time. That is $36,000 to $54,000 of payroll sitting in unpaid invoices. The Dough gap calculator will run the same sum with your own numbers.

What funding can cover payroll?

For trading businesses, unsecured funding is typically $5,000 to $500,000, sized on turnover and bank statements. The usual shapes are:

1. A working-capital loan sized to the gap (see working capital loans).
2. A line of credit for gaps that repeat (see business line of credit).
3. A short-term loan when a specific payment, such as a delayed contract, is the cause.
4. Property-backed funding if the amount is larger and you own property.

Lenders will want to see the bank statements, the amount and a clear reason for the shortfall. Past credit issues and ATO debt are considered case by case, and PAYG or super arrears are best raised upfront.

What can I do besides borrowing?

Business.gov.au suggests several levers that help payroll directly:

• Check the total cost of employment and consider flexible rostering.
• Invoice sooner, offer deposits or early-payment discounts, and follow up overdue accounts.
• Consider commissions paid only after customers pay.
• Talk to an accountant or business adviser before changing anything big.

If you cannot meet payroll obligations to the ATO, business.gov.au says to contact the ATO on 13 11 42, and the free Small Business Debt Helpline is available on 1800 413 828.

A pay-run checklist for tight weeks

When money is thin, run through this list at least a week before the pay date:

• Total the real cost. Net wages, PAYG withholding and super, all in one number.
• Check what is coming in. Which invoices are due, and how likely is each to land on time? Chase the big ones today.
• List what can slide. Some supplier bills can move a week without harm. Wages and PAYG cannot.
• Look at the gap. If the shortfall is real, you have days rather than hours to arrange funding.
• Tell your accountant. They may see an option you have not.
• Plan the repeat. If the same gap appears next fortnight, you need a structural fix such as a line of credit, tighter terms or a bigger buffer.

Ten minutes spent on this list is cheaper than a rushed decision on the morning of pay day.

What goes wrong most often?

• Treating PAYG withholding as spendable. It is not your money. Park it somewhere you will not touch it, as described in the tax-dough jar guide.
• Hiring ahead of cash. A new hire costs money before they earn it. See funding a hire.
• Leaving funding until pay day. The best time to arrange it is a few weeks earlier, while statements still look healthy.
• Ignoring the underlying cause. If the gap is permanent, loans only buy time.

Time to talk

If the next pay run feels uncertain, do not wait for the last day. Enquire now with the amount, the pay date and the reason for the gap. A lending specialist reads it, calls you, and tells you straight what is realistic. There is no credit check to ask, and your details do not get sprayed around a crowd of lenders.

Accurate numbers (the real payroll total, the real due date) let us get to the right option on the first call. See if you qualify and keep your team paid.