Emergency payroll funding: options compared

What exactly needs funding on payday?

When owners think about payroll, they usually think about net wages — the money hitting employees’ accounts. But each pay run actually creates three obligations:

1. Net wages to employees, on the pay date set by the award, agreement or contract.
2. PAYG withholding collected from employees’ pay, which belongs to the ATO and is reported on your activity statements.
3. Superannuation, which under Payday Super generally has to reach each employee’s fund within 7 business days of payday.

A payroll emergency that only funds the first leaves the other two to become tomorrow’s emergency. Size funding to cover all three.

Which funding fits which payroll problem?

Problem	Best fit	Why
One late customer, one tight pay run	Short-term cash-flow loan	Quick, sized on turnover, repaid when the customer pays
Every fortnight is tight	Line of credit	Draw each cycle, repay from receipts
Payroll plus ATO arrears plus suppliers	Property-secured second mortgage	Clears everything at once
Big seasonal workforce	Line of credit sized for the peak	Matches the season
Payroll due today, property available	Caveat loan	$20k to $250k same day possible

How do timing and cut-offs work?

Approval is only half the battle. Payroll providers and banks have cut-off times for same-day payments, and super clearing houses need time to pass money to funds. Before you apply:

• Ask your payroll provider for the latest time funds can arrive for the pay run to go out today.
• Check how long your super payment method takes to reach funds.
• Start the enquiry as early in the morning as you can, with documents ready.

If you’re working towards a Friday pay run, the by Friday page covers the timing in detail.

Illustrative example: a labour hire firm between invoices

Illustrative only. A Queensland labour hire business pays 85 workers weekly, but its two largest clients pay on 30-day terms. Most weeks it manages, but a new client contract means two extra weeks of wages before the first invoice is paid — about $140,000 of wages, withholding and super.

The business has strong statements but no property. It sets up a $200,000 line of credit, draws $140,000 over two weeks and repays it within six weeks as invoices are paid. The next contract ramp-up is handled the same way, without a fresh emergency.

What to avoid

• Short-paying staff or delaying wages without advice — the underpayment risk outweighs the cost of funding.
• Funding wages with PAYG and GST you owe the ATO.
• Stacking short-term loans to cover each pay run. If you need funding every cycle, you need a facility or a structural fix, not a series of loans.
• Ignoring the cause. Look at payment terms, deposits and pay-cycle timing once the emergency is over.

The can’t make payroll page has the night-before checklist, and the Payday Super shortfall page covers super deadlines.

How much should I fund for each pay run?

Work it out from the pay-run report rather than estimating:

Item	Where to find it	Timing
Net wages	Pay-run summary	Pay date
PAYG withholding	Pay-run summary	Reported and paid with your activity statement
Super	Pay-run summary or clearing house	Generally within 7 business days of payday
Payroll tax (if applicable)	State revenue office return	Monthly or as set by your state
Workers compensation instalments	Insurer schedule	As set by your policy

Most payroll emergencies are funded for net wages only. Funding for the full set — or at least setting the withholding and super aside in a separate account the day wages go out — stops the pay-run emergency turning into a tax or super emergency two weeks later.

When is it time to change the payroll cycle instead?

If your customers pay monthly and you pay staff weekly, the business is lending money to its own payroll every week. Moving to a fortnightly cycle, or aligning paydays with when receipts typically land, can reduce the gap permanently. Changing a pay cycle has award, agreement and contract implications, so get advice and give staff proper notice. Combined with a modest line of credit, it often removes the need for emergency payroll funding altogether.

Pay your people on time

Your team shouldn’t have to wait because a customer is slow. Start a 60-second enquiry with your payroll total, payday and cut-off time.

There’s no credit check when you first enquire, and we don’t share your enquiry with a crowd of lenders — one specialist reviews it and calls you back. Accurate figures on wages, withholding, super and expected receipts help us choose between a one-off loan and a standing facility. See if you qualify.