Payroll is due and the cash isn't there

Short answer first: your staff get paid, in full, on the day. Everything else on this page is about how to make that happen when the bank balance says otherwise, and how to stop the next pay run feeling the same way.

Running short on a pay run says little about whether the business is any good. Profitable firms hit it constantly, usually because a big customer paid late, a contract needed materials up front, or a quarterly bill landed in the same week as a fortnightly pay run. What matters is how quickly you identify the cause and match it with the right kind of money.

Why wages leave the least room to move

Plenty of bills can bend a little. Wages can’t. Awards and agreements set the pay cycle, the Fair Work Act requires payment at least monthly, and since 1 January 2025 deliberately underpaying staff has been a criminal offence. Late pay also does damage no lender can fix: good people start looking elsewhere.

There’s a second layer that changed this year. Under Payday Super, live since 1 July 2026, super travels with each pay run and has 7 business days after payday to land in the worker’s account (new employees get 20 business days for their first contribution). Treating quarterly super as a quiet float is no longer possible. If the cash is short for wages, it’s short for super in the same week.

Then there’s PAYG withholding. Withheld tax and super are the two debts that can follow directors personally through a director penalty notice. See business loans with unpaid super if super has already slipped behind.

The order to pay things in when cash is short

When there isn’t enough for everything this week, a sensible order is:

1. Net wages, on time.
2. Super within the 7 business day window.
3. PAYG withholding: at minimum, report it on time, and pay or arrange a plan.
4. Suppliers you can’t trade without, especially accounts with retention of title or your personal guarantee.
5. Everything else, negotiated with honesty and dates.

If items 1 to 3 can’t be covered from cash, that’s the amount you’re trying to fund. Add a buffer of one more pay cycle so you’re not back here in a fortnight.

What lenders look at when you’re funding payroll

Lenders aren’t troubled by the word “payroll” on its own. They want to know if the shortfall comes from slow receipts or from thin margins.

What they check	What reassures them
Last 3 to 12 months of bank statements	Regular deposits, few dishonours, payroll normally covered
Debtor book	Invoices owed by creditworthy customers that will pay soon
Why this pay run is short	A specific, checkable cause such as a late payer or upfront contract costs
ATO position	BAS and super reported on time, any debt on an agreed plan
Existing short-term debt	No stack of daily-repayment loans already draining the account

If a big customer simply hasn’t paid yet, take the remittance advice or the overdue invoice with you. It’s the single most persuasive document in a payroll application.

Which funding can land before payday?

Ranked roughly from cheapest to fastest-but-dearest, for a trading business:

1. Your bank. If you already have an overdraft or facility, ask for a temporary increase. Banks are usually the lowest-cost option and can move quickly for a customer they know. If they decline, that’s not the end of it.
2. Business overdraft or line of credit with another lender. Set up once, drawn whenever a pay run lands awkwardly. Better suited to a recurring pattern than a single loan.
3. Invoice finance. When clients take a month or two to settle, this unlocks the money tied up in their invoices, often within a day once the facility is open. It fixes the root cause when slow payers are the problem.
4. A short unsecured business loan. Fintech and non-bank lenders size these on turnover and bank statements, and many decide the same day. Check the total dollar cost and the repayment frequency, because daily or weekly repayments affect the next payroll too.
5. Property-secured funding. For larger amounts or where other lenders have said no, equity in property can secure a short loan quickly.

If it’s a single bad month, a short loan is fine. If you’re short every second pay cycle, a facility is the better tool, and a hard look at pricing and debtor terms is better still.

Want someone to look at your payroll gap with you? Start a quick enquiry — a minute or so, and your credit file isn’t touched.

A worked example

An illustrative case. A Perth electrical contractor with 14 staff runs a fortnightly payroll of about $68k in net wages, plus roughly $10k in super and $16k in PAYG withholding. A head contractor has held back a $140k progress claim pending a site sign-off, and the business account has $41k in it two days before payday.

The shortfall for this pay run, including super and withholding, is around $53k. The owner asks their bank for a temporary overdraft increase; the bank wants three weeks to review. Instead, the owner sets up invoice finance against the business’s other approved invoices and the held claim once signed off. About $60k is advanced the next day. The pay run goes out on time, super is paid within the week, and the facility stays open for future progress-claim delays. The cost is the facility fees on what was drawn, which the owner weighs against losing two senior electricians to a rival.

See how long today’s balance will last using the cash runway calculator.

Mistakes to avoid this payday

• Skipping super “just this once”. Under Payday Super, late contributions trigger the super guarantee charge quickly, and it costs more than paying on time.
• Not lodging because you can’t pay. Late reporting of PAYG and super closes off some of the protections directors otherwise have.
• Borrowing without knowing why the gap appeared. Fix the cause, or the loan only moves the shortfall forward a month.
• Choosing repayments that hit the next pay week. Match repayment timing to when your customers pay.
• Telling staff late, or not at all. If any non-core payment (a bonus or reimbursement) must slip, tell people early and set a date.

For the purpose view of this topic, our page on paying staff wages compares options side by side, and the guide on funding payroll in a tight month goes deeper on planning.

Payday is coming: here’s how we can help

A business that’s short on payroll this week but has customers, invoices and a reason for the gap is exactly the kind of business lenders can support, provided it reaches the right one quickly.

The form is about a minute’s effort, and enquiring leaves no trace on your credit history. You won’t be passed from lender to lender or flooded with calls. Instead, one of our team reads it properly and phones you to work out the fastest sensible fix before the pay run. Give us the real payroll figure, the payday and what’s owed to you, because those numbers decide which lender can fund in time.

Cover this pay run →