Funding superannuation payments under Payday Super

Until mid-2026, super for July wasn’t due until 28 October. For a business paying staff weekly, that meant the first pay run of the quarter carried super that wouldn’t leave the account for nearly four months. Plenty of owners never thought of it as borrowed money, but it worked like an interest-free facility from their employees’ funds. Payday Super ended it on 1 July 2026.

This page is about funding that change: the one-off cash hole it leaves, the higher cost of falling behind, and the finance options that fit.

Where did the super float go?

Under the old quarterly system, an employer’s bank balance held, on average, around two months of super at any given time, and up to four months’ worth just before each quarterly deadline. Now the money leaves within a week or so of each payday.

That has two effects:

1. A one-off drain. The super you used to hold has to come from somewhere. For many small employers it’s an amount equal to roughly one to two months of super, permanently gone from working capital.
2. A tighter rhythm. Every pay run now pulls wages and super out together, so the low point in your account each cycle is lower than before.

Neither means the business has become less profitable. It’s purely timing. But timing is exactly what tips a business from comfortable to stretched, especially one that also absorbed the 4.75 per cent award wage rise from July 2026.

What changed on 1 July 2026

As at October 2026, the ATO’s guidance sets out the core changes:

• Payment timing. Contributions are on time if the employee’s fund receives them, with the information it needs, within seven business days after payday. Some new employees have a longer initial window.
• Calculation base. Super guarantee at 12 per cent is worked out on qualifying earnings for each pay run.
• No more free clearing house. The ATO’s Small Business Superannuation Clearing House closed permanently. Payroll software, super fund portals and commercial clearing houses now do that job, some for a fee.
• A new charge. If a contribution is late or short, the super guarantee charge is calculated for each payday, not each quarter.

The ATO has signalled a reasonable approach in the first year for employers making a genuine effort, but the obligation and the charge still apply.

Why late super got more expensive

Under the new rules, the charge for a missed payday is built from three parts: the shortfall itself, a notional earnings component that accrues from the day after the deadline, and an administrative uplift starting at 60 per cent of those amounts. The ATO says a voluntary disclosure made before it issues an assessment can reduce that uplift.

Two more things make late super a poor way to manage cash:

• It isn’t deductible. The super guarantee charge can’t be claimed as a tax deduction, whereas interest on a loan used for business purposes generally can.
• Directors carry personal risk. Unpaid super guarantee charge falls under the director penalty regime, which can make directors personally liable. If you’ve received a notice, see our page on director penalty notice funding.

Put simply, borrowing to pay super on time is usually cheaper than paying it late, as long as the business can service the loan.

If super is already behind, or the next few pay runs look tight, start an enquiry here. The form is brief, and a lender reading your credit file later wouldn’t know you’d asked.

Which finance options suit super?

Situation	Finance that tends to fit	Why
The one-off transition gap from losing the float	Business line of credit or overdraft	Draw it once, reduce it as cash flow settles, keep it as a buffer
Recurring tight weeks around payday	Line of credit or invoice finance	Covers the low point each cycle; invoice finance suits slow-paying customers
A catch-up amount owed from earlier quarters	Short-term business loan or unsecured loan	Clears the debt and stops the charge growing, repaid over months
A large super debt alongside other ATO debt	Property-secured loan, such as a second mortgage	Longer term, lower monthly repayments, one plan for all of it

Your bank is a good first call for a line of credit if your business banking and financial statements are in order; it is often the cheapest option. If the bank says no because of the super debt itself, or because of a recent dip in trading, non-bank lenders look at unpaid super case by case. Our page on business loans with unpaid super explains how they assess it.

A five-step plan for getting on top of super

1. Measure the missing float. Compare your old average bank balance with what it looks like now each payday. The difference is roughly the float you need to replace.
2. Clear anything overdue first. Lodge any outstanding super guarantee statements, consider a voluntary disclosure, and get the old debt off the books.
3. Check your payment set-up. Make sure your payroll software or clearing house can meet the seven-business-day window reliably, including fund validation errors that can delay allocation.
4. Put a buffer facility in place. A modest revolving limit covering a couple of pay cycles’ worth of super protects you from a late customer derailing your super payments.
5. Revisit pricing. If wages and super together have outgrown your margins, finance won’t fix it. Our cash runway calculator shows how long reserves last at the current burn.

Worked example: a physiotherapy clinic loses its float

An illustration only. A physiotherapy clinic in Perth employs 11 staff, paid fortnightly, with gross wages of about $78k a month. Super at 12 per cent comes to roughly $9,360 a month.

Under quarterly super, the clinic’s account typically carried between one and four months of super, averaging about $18,700. From July 2026 that money starts leaving within days of each pay run. Around the same time, its health fund rebates and NDIS claims slow down for a few weeks after a software change.

By September, the clinic has missed one fortnight’s super deadline by a few days and is worried about the next. The owners:

• Pay the late contribution immediately and lodge a voluntary disclosure, on their accountant’s advice
• Take a $40k business line of credit from a non-bank lender, as the bank wanted more time to review recent trading
• Use $20k to rebuild the float and keep the rest undrawn as a buffer
• Move to a payroll system that pays super automatically on each pay run

Six months later, the line of credit is mostly repaid from normal cash flow and sits ready for the next slow patch.

Keeping super on time without draining the business

Payday Super isn’t going away, and for most businesses the adjustment is a one-off cash problem, not a permanent one. The right facility, in place before a missed deadline, turns it into a non-event.

Our enquiry form asks a handful of questions and is done in about a minute. Your credit score is left exactly as it was, and your details aren’t distributed among a queue of lenders hoping for a sale. A specialist on our side looks at your payroll and any super debt, then gives you a call. The more accurate your figures for wages, super owed and turnover, the sooner we can line up an option that works.

Fund your super payments on time →