Payroll is due and the money isn't there: how to fund wages in a tight month

There is a particular kind of stomach drop that comes on a Tuesday when payday is Thursday and the account is short. Nothing has gone wrong in the business’s long-term story. A customer is late, a big supplier invoice landed early, or the quiet month came in quieter than planned. But people have rent to pay, and they are counting on you.

This guide is for the days around that moment. It sets out what payroll really costs now that super follows each pay run, how to size the gap properly, and the options for covering it, from free to paid, in a sensible order.

What does payday actually cost you now?

Until mid-2026 most employers thought of payroll as two things: net wages each pay cycle, and a super payment every quarter. Payday Super has changed the second half. For paydays from 1 July 2026, super generally has to reach each employee’s fund within seven business days of the day you pay them, with a longer window for the first payment to a new employee.

In practical terms, a business paying fortnightly now has a super obligation fortnightly too. The cost of the quarter used to arrive in one lump that you could save towards. Now it flows out alongside wages, and the cash cushion that came from holding super for up to a few months is gone.

Add up each pay run in full:

Component	What to include
Net wages	Take-home pay for every employee, including casuals and any overtime or penalty rates
PAYG withholding	Tax withheld on wages, which is reported and paid on your BAS cycle
Super	The super guarantee on qualifying earnings, due within the window after payday
Leave and on-costs	Payroll tax where it applies in your state, workers compensation instalments

Keep the tax withheld on wages separate in your head. It is money you are holding for the ATO, not working capital. Treating it as spendable is how small businesses end up with a BAS they can’t pay.

How do I size the gap?

Don’t borrow “about $40k to be safe”. Build a short day-by-day view for the next six weeks.

1. List every payday and super due date.
2. Add rent, loan repayments, supplier invoices and tax due dates.
3. Under it, list money you can confidently expect, with the date you really expect it (not the due date on the invoice).
4. Work out the lowest point your account reaches, and the date it recovers.

That lowest point is the real gap. The date it recovers tells you how long the funding is needed. A $25k hole for nine days is a very different problem from a $25k hole that never closes. Our 13-week cash flow forecast guide shows a template, and the cash flow gap calculator will do the sums quickly.

What order should I pull the levers in?

Work from cheapest and fastest to more involved.

1. Collect what you’re owed. Phone the customers who owe you money, starting with the biggest. Offer a small incentive for payment this week if the margin allows. Our guides on getting customers to pay faster and managing slow payers have scripts.

2. Move supplier timing. Ask your largest suppliers whether this month’s invoice can be split or moved by two weeks. Suppliers say yes more often than owners expect, particularly if you ask before the due date and give a firm new date.

3. Use a facility you already hold. If your bank gave you an overdraft or line of credit, using it for a genuine timing gap is exactly what it’s for. Banks are often the cheapest source of money, and an existing limit is far quicker than anything new.

4. Talk to the ATO about other debts, not wages. If an instalment or BAS is also due, you can ask the ATO for time. Wages and super should not be the thing that waits.

5. Arrange short-term funding. If the gap is real and temporary and the options above don’t close it, new finance matched to the timing is the next step. More on that below.

6. Reduce the next gap. After the immediate fix, look at rostering, pricing or collection terms so you aren’t back here in a month.

If you already know the gap won’t close on its own, put the numbers in front of us before payday rather than on it.

What finance options suit a payroll gap?

Option	Suits	Watch for
Business overdraft or line of credit	Recurring small gaps, already in place	Needs setting up before you’re stressed; limits can be reduced
Invoice finance	You’re waiting on large, reliable invoices	Fees accumulate if used continuously
Working capital loan	A clear, short-term shortfall with cash expected back	Repayment frequency should match your income pattern
Short-term business loan	A defined bridge of weeks to a few months	Higher total cost for speed; know the dollar figure to repay
Property-secured loan	Larger or longer gaps, where owners have equity	Slower to arrange; your property is at stake

Check the dollar total, not the label. Our loan cost comparison calculator puts options side by side so you can see what each costs to repay in actual dollars. A quick option that costs $3,000 more than a slightly slower one may be worth it for a one-week gap and not for a three-month one.

Lenders will usually ask for recent bank statements, an ABN and ACN where relevant, and confirmation of what the money is for. If the stress is about wages specifically, say so. A clearly explained, short-term purpose helps more than a vague request.

What should I tell my staff?

If you’re going to be late, tell people before payday, not on it. A short, honest message works better than hoping it goes unnoticed:

• State the date they will be paid, not “soon”.
• Say what has caused it and what you are doing.
• Pay the people with the least buffer first, if you must stage payments, and be transparent about it.

Late wages are a Fair Work issue, and since 1 January 2025 deliberately failing to pay required amounts when due can be a criminal offence called wage theft. That’s about intent, and a timing gap you are actively fixing is a very different thing. It is still a good reason to treat wages as the line you hold.

A worked example: the physio clinic

This example is invented for illustration. A physiotherapy clinic with eight staff pays fortnightly. Net wages run about $34,000 and super about $4,800 per pay run. A large private health fund payment, normally in by the 10th, slips to the 24th because of a processing error.

The owner builds a daily view and finds the account hits a low of about $19,000 short on the 15th, recovering on the 24th. Nothing else is wrong; the clinic is profitable. The owner rings the health fund, which confirms the new date. The clinic’s bank grants a temporary overdraft increase of $20,000 for three weeks, repaid when the fund pays.

If the bank had said no, the next step would have been a short-term facility for the same nine-day gap. Because the gap is brief and the cause is clear, the cost in dollars is small. Without the day-by-day view, the owner would have asked for $50,000 “to be safe” and carried the repayments for months.

Mistakes that make payroll gaps worse

• Spending PAYG withholding as if it were your own money.
• Borrowing the average gap instead of the peak, then running short anyway.
• Letting super slip because it is not yet “due”, forgetting the seven-business-day window.
• Applying for finance on payday itself, when funding takes days.
• Taking the first offer without checking the total repayable.
• Not telling the lender what the money is for.

Payroll is close and the money’s short: what next?

Cash gaps around wages are common and rarely a sign that the business is failing. The skill is in sizing the gap correctly and matching the funding to when cash returns. We speak to owners in this position often, and we’d rather help you find an option that suits the timing than watch you grab one that doesn’t.

Sending an enquiry takes about a minute, and it doesn’t touch your credit file. Your details aren’t scattered across a list of funders; a person at our end reads your situation, then rings you. Put in the true size of the shortfall and the date money should come back in. With accurate details we can raise the right option first.

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