Hiring staff: cash flow and Payday Super in three steps

Why does hiring squeeze cash flow?

Because people are paid before they produce. A new technician needs training, a new chef needs a few weeks to find their rhythm, a new salesperson takes months to close their first deals. Meanwhile wages, super and on-costs leave the account from the very first pay run.

Most owners searching “can I afford to hire someone” are really asking a cash flow question: can the business carry the cost until the new hire pays their way?

What changed with Payday Super?

Since 1 July 2026, the ATO’s Payday Super rules have replaced quarterly super payments. According to the ATO’s guide on how to work out and pay super:

• Super is 12% of qualifying earnings for each pay period.
• Contributions must be received by the employee’s fund no more than 7 business days after payday, unless a longer period applies.

Under the old system, an employer might hold super for up to a few months before paying. That float has gone. Each new hire now adds wages and super to every pay run, almost immediately.

Step one: what does a new hire really cost?

Build a per-pay-run cost, not just a salary figure:

Cost	Notes
Gross wages	Per award, agreement or contract
Super	12% of qualifying earnings
Workers compensation insurance	Varies by state and industry
Payroll tax	Only if you exceed your state’s threshold
Equipment, uniforms, software	Often upfront
Training time	Lost productivity of the trainer too

Employers must pay staff at least monthly, according to the Fair Work Ombudsman, and many awards require more frequent pay. Use your actual pay frequency for the calculation.

Step two: how long until they pay their way?

Estimate the number of pay runs between their first day and the point where their work reliably turns into cash. For a trade business, that might be the time to train plus the time customers take to pay invoices. For a café, it might be a few weeks. For a sales role, it can be months.

Multiply the per-run cost by that number, and you have the ramp-up gap.

Illustrative example only. An electrical contractor hires an apprentice and a qualified electrician to take on more commercial work. Customers pay on 30-day terms. Adding training time, the owner estimates about eight weekly pay runs before the extra work turns into cash. Multiplying the weekly cost of both hires, with super, by eight gives a specific number to fund.

Want help working out your own number and how to fund it? Send a 60-second enquiry. A real person will call, and there’s no credit check involved.

Step three: how do I fund the gap?

• Reserves, if you have them, are the cheapest option.
• A line of credit suits businesses that hire in waves or have seasonal staff. Draw for the ramp-up, repay as income catches up. See business line of credit.
• A cash flow loan, typically $5,000 to $500,000 sized on turnover, suits a one-off step up. See cash flow loans.
• Invoice finance suits businesses billing other businesses, unlocking invoices as soon as they’re issued. See invoice finance.

Our payroll finance page compares these in more depth.

Good habits for a bigger team

• Automate super with each pay run through your payroll software, so it never waits.
• Separate account for PAYG and super, transferred each payday.
• Diarise the dates: paydays, super deadlines, BAS.
• Review monthly: is each new hire on track to pay their way?

For a deeper look at how Payday Super affects cash flow, read the Payday Super cash flow guide.

Should I hire a casual, contractor or permanent employee first?

The answer shapes your cash flow as much as your roster. A quick comparison:

• Casual employees offer flexibility to match busy periods. You still pay super on qualifying earnings under Payday Super, and casual loading may apply under the relevant award.
• Contractors may suit specialised or short-term work, but the rules on who is genuinely a contractor are strict. Getting it wrong can lead to backdated super and other obligations, so check with your accountant or the Fair Work Ombudsman.
• Permanent employees give you stability and commitment, with leave entitlements to budget for.

From a finance point of view, flexibility helps during the ramp-up. Some businesses start with casual hours, then convert to permanent roles once the extra work is proven and the cash flow is steady. That staged approach reduces how much you need to fund upfront.

Whatever mix you choose, the same principle applies: count the pay runs between hiring and income, and fund that gap deliberately rather than hoping it works out. If the hire is linked to new work, our page on winning a big contract shows how to split the need into equipment, working capital and setup costs. For ongoing payroll gaps, see business line of credit.

Growing the team? Let’s fund it properly

Hiring is a great problem to have. Funding the ramp-up properly means you can grow without risking a missed pay run.

When you enquire, nothing touches your credit file. A real person reads your situation and calls you, and your details aren’t scattered across a list of lenders. Please be accurate on the form about turnover, how many people you’re hiring and how quickly customers pay, so we can match the right facility on the first call. See what fits your business.