Quick answer
If wages or super are due and the account is short, a short unsecured or cash flow loan can cover the gap, with same-day funding possible for smaller amounts once statements are linked. Borrow only the wage run, PAYG and super that are due. If the shortfall keeps happening, a line of credit or a look at your payment terms usually fixes the cause better than repeated short loans.
Key points
- Borrow only the wage run, PAYG and super that are due.
- Same-day funding possible for smaller amounts with linked statements.
- A one-off gap suits a short loan; a repeating one suits a credit line.
- Never skip super or PAYG to make wages; the consequences are serious.
- Typical route
- Short unsecured or cash flow loan
- Have ready
- Payroll summary, linked statements, ID
- Watch for
- Repeating shortfalls
- Speed
- Same-day funding possible for smaller amounts
Payday has a way of arriving at exactly the wrong moment. A big customer pays late, a quarterly bill lands the same week, and suddenly the account that looked fine on Monday won’t cover Thursday’s pay run. For any owner who employs people, it’s one of the most stressful positions to be in.
The good news is that a short wage gap is one of the easier problems to fund quickly, as long as you borrow the right amount and understand why it happened.
Work out exactly what’s due
Before you look at loans, get the real number. A pay run is more than net wages:
| Item | Why it matters |
|---|---|
| Net wages | What staff receive |
| PAYG withholding | Owed to the ATO; reported through Single Touch Payroll |
| Superannuation guarantee | Due by the quarterly deadline, with charges if late |
| Payroll tax, if it applies | State-based, with its own due dates |
| Any leave or termination payouts | Sometimes forgotten until the run is processed |
Borrow what’s actually due across those lines, plus a small buffer. Not a round number. Every extra dollar borrowed quickly costs more than it needs to.
Never trade super for wages
When cash is short, some owners pay staff and quietly let super or PAYG slide. It’s an understandable instinct, but it’s one of the most expensive mistakes a business can make. Late super attracts the super guarantee charge, and for company directors, unpaid super and PAYG withholding can become a personal liability under the director penalty regime. If you’re borrowing to cover payroll, cover all of it.
How fast it can move
Payroll gaps are usually smaller amounts with a short, clear repayment source: the customer payments that are late. That suits a short unsecured loan or a cash flow loan. With online banking linked on the first call, ID ready and every director able to e-sign, same-day funding is possible for smaller amounts once the file is complete. Enquire early in the day; banks release funds on business days, and late-afternoon requests can roll into the next morning.
What to have ready
- A payroll summary showing the run, PAYG and super due.
- Online banking ready to link.
- Photo ID for each director.
- A list of the invoices you’re waiting on and when they’re due.
- Your latest BAS and ATO portal statement, if handy.
One-off gap or a pattern?
This is the question that decides whether a short loan is the answer.
A one-off gap has a clear cause and end: a customer paid late, a big bill landed in the same week, a seasonal dip came early. A short loan repaid from the late payment fixes it cleanly.
A pattern shows up most months. Customers pay on long terms, wages go out weekly or fortnightly, and the business is always a week behind. Taking a new short loan every month is expensive and lenders notice. A line of credit or cash flow facility suits this better, alongside a look at your payment terms. Our page on customers paying late covers the fixes on the income side.
An illustrative example
A Newcastle café with eleven casual and part-time staff has a fortnightly pay run of about $24,000 including PAYG and super. A catering client owing $31,000 pays two weeks late after a change of accounts staff. The owner’s account will be $14,000 short on payday. She links her statements, shows the overdue invoice and the client’s payment history, and takes a short unsecured loan for $16,000, repaid when the client pays. Staff are paid on time and nothing else is affected. Illustrative only.
If the shortfall is bigger than a pay run
If wages are only one part of a broader cash problem, with suppliers and the ATO also behind, a fast loan for payroll can buy time, but it won’t solve the underlying issue. Talk to your accountant about the overall position, and look at whether a larger, longer-term facility or a restructure of existing debts makes more sense. Business.gov.au lists free small business financial counselling services if you’d like an independent view.
Talking to staff
If there’s any chance pay will be late, tell staff early, honestly and in person. But in most cases, a modest short loan that keeps pay on time protects trust in a way no apology can. People remember when their pay was late far longer than owners expect.
Keep payday on time
Tell us what’s due, when and what’s coming in to repay it. Asking doesn’t touch your credit file, we don’t fire your details off to a dozen lenders, and one real person reads it and calls you. Be accurate about the amount and the invoices you’re waiting on, and we can move at the speed a pay run needs. Start your enquiry or try the route planner.
Frequently asked questions
Can I borrow to pay staff?
Yes. Paying wages is a legitimate business purpose. Lenders mostly want to see that the shortfall is temporary and that income is on the way to repay it.
What happens if I pay wages but not super?
Unpaid super guarantee can lead to charges and, for company directors, personal liability under the director penalty regime. Include super in what you borrow.
Should I tell staff?
If pay might be late, staff should hear it from you early and honestly. But a short loan that keeps pay on time is usually far better for the business than a late pay run.
Is a line of credit better for payroll?
If shortfalls happen most months because customers pay slowly, yes. You draw only what's needed each pay cycle and repay when invoices land.