Hiring staff under Payday Super: planning the cash flow with your adviser

Hiring is one of the most common reasons business owners end up talking to a lender — and one of the least planned for. The decision usually comes from a good place: more work than you can handle, a business coach encouraging you to step back from the tools, or a contract that needs extra hands. But every new hire opens a gap between money going out every pay day and the extra revenue that arrives later. Add the change to super timing from 1 July 2026, and it’s worth sitting down with your accountant or bookkeeper before you sign the employment contract.

What a new hire actually costs, and when

The cost of an employee isn’t just the salary. From the first pay run, you’ll typically be paying:

• Gross wages — including PAYG withholding, which you hold and pass to the ATO through your BAS
• Super guarantee — 12% of qualifying earnings for both 2025–26 and 2026–27, according to the ATO
• Workers compensation insurance — premiums vary by state and industry
• Payroll tax — if your total wages exceed your state’s threshold
• Recruitment and onboarding — advertising, training time, equipment, uniforms, software licences
• Leave entitlements — accruing from day one

Some costs are up front, some are every pay cycle, and some build quietly on the balance sheet. Your accountant can turn them into a realistic per-pay figure.

What Payday Super changes

Until 30 June 2026, many employers paid super quarterly, which meant up to three months between paying wages and paying the related super. That timing gap quietly funded working capital for many small businesses.

From 1 July 2026, under Payday Super, employers need to pay super guarantee at the same time as wages. The ATO’s payment deadline guidance says a contribution is on time if it’s received by the employee’s super fund within 7 business days after paying the employee, with longer periods (such as 20 business days) for certain situations like new employees or new funds.

What it means for cash flow:

Before (quarterly)	Under Payday Super
Wages paid each cycle; super held until quarter end	Wages and super both leave each cycle
Up to three months of super in the account	No extended holding period
Large quarterly super payments	Smaller, more frequent payments
Quarter-end cash dips	Smoother but permanently lower balance

For a business adding staff, this means the full cost of each employee hits the account every pay day from the start. Your bookkeeper should update the cash forecast to reflect it.

Mapping the ramp-up

Most new employees don’t generate their full value from week one. A typical pattern:

1. Weeks 1–4: Learning systems, shadowing, limited billable output
2. Months 2–3: Increasing productivity; work starts being invoiced
3. Months 3–5: Invoices from their work start being paid (depending on your terms)
4. Month 6 onward: Contributing fully, paying their way and more

Ask your accountant to build a month-by-month forecast with three lines: the employee’s full cost, the extra revenue they generate (in the month it’s received, not invoiced), and the net effect on cash. The lowest cumulative point is the size of your funding gap. Business.gov.au’s cash flow statement template is a sensible starting point.

An illustrative forecast

A hypothetical cabinet-making workshop hires a second qualified tradesperson. The accountant estimates the full cost, including super and on-costs, at about $8,500 a month. Extra revenue is expected to build from around $3,000 received in month two to about $14,000 a month by month six.

Month	Cost	Extra revenue received	Net	Cumulative
1	$8,500	$0	−$8,500	−$8,500
2	$8,500	$3,000	−$5,500	−$14,000
3	$8,500	$7,000	−$1,500	−$15,500
4	$8,500	$10,000	+$1,500	−$14,000
5	$8,500	$12,000	+$3,500	−$10,500
6	$8,500	$14,000	+$5,500	−$5,000

The lowest point is about $15,500 in month three, and the hire is fully self-funding by around month seven. All figures are illustrative. That shape — a dip, then a recovery — is exactly what a line of credit is designed for.

Choosing the right finance

Situation	Finance that usually fits
One hire, short ramp-up, steady business	Line of credit or existing buffer
Several hires for a new contract	Line of credit sized to the contract’s cash cycle
Hiring plus equipment or vehicles	Term loan for the assets, line of credit for wages
Large expansion, owner has property	Property-secured facility with a longer term

For context: facilities without security tend to sit between $5k and $500k for an established trading business, and lenders size them from what your deposits show. Where the owner has property, secured limits run from $20k up to $5m.

Getting payroll ready for Payday Super

Whether or not you borrow, a new hire after 1 July 2026 should start on a payroll set-up that handles super every pay cycle. Ask your bookkeeper to check:

• Payroll software is configured to calculate and pay super with each pay run
• The employee’s fund details are collected at onboarding, since new employees and new funds can have different deadline rules
• Bank account timing allows super and wages to leave together without causing a dishonour
• The cash forecast reflects super leaving every cycle rather than quarterly
• BAS workpapers still capture PAYG withholding correctly for the larger payroll

Lenders increasingly notice payroll discipline. Super and PAYG withholding paid on time, every time, reads as a well-run business; missed or late payments raise questions about cash pressure.

Questions to ask your accountant before the job ad goes up

1. What’s the full monthly cost of this role, including super and on-costs?
2. When will the work they do turn into cash received, given our payment terms?
3. What’s the lowest cash point in the first six months?
4. Would a part-time or casual start reduce the gap?
5. If we need a facility, what size and type would suit the shape of the ramp-up?

Those five answers turn a gut-feel hiring decision into a planned one.

Stress-test before you hire

Ask your accountant two questions:

• What if the ramp-up takes twice as long? If the business can still meet wages and any repayments, the plan is robust.
• What if the extra work disappears? Could you redeploy the person, or would you be carrying a cost without revenue?

If the answers are uncomfortable, consider a part-time or casual start, a fixed-term contract, or waiting until a contract is signed. Finance should bridge a sensible ramp-up — not fund a role the business can’t sustain.

What lenders look for in a hiring-related application

• Recent trading — bank statements, BAS and a year-to-date P&L (how profit links to servicing)
• Evidence of demand — a contract, a pipeline, or a pattern of turning work away
• The forecast — showing when the hire becomes self-funding
• Payroll discipline — PAYG withholding and super paid on time, which matters more under Payday Super

Your bookkeeper’s reports often carry this file. See our page on bookkeeper cash flow warnings for how they help.

For advisers: raising it with clients

If a client mentions hiring in passing, that’s one of the eight funding signals advisers notice. A simple follow-up — “Have you mapped how that affects cash over the first six months, especially with super now due every pay?” — can prevent an urgent call later.

Hire with confidence

If your forecast shows a hire becoming self-funding but the first few months are tight, a facility sized to the gap can make the decision much easier. Make a 60-second enquiry and tell us about the hire and your current turnover. There’s no credit check to enquire, your file goes to one appropriate lender rather than a crowd of them, and a real specialist will call you — with your accountant involved if you prefer. Accurate figures help us link you with the right facility the first time. See how to fund the ramp-up.