Author name: Krishna

SMEs facing increased working‑capital requirements under Payday Super can choose from a range of finance solutions: overdrafts, invoice finance, term loans, payroll funding and even private credit. Banks generally offer lower rates but have strict approval criteria and slower processing. Non‑bank lenders provide speed and flexibility at higher cost. The optimal mix depends on your industry, cashflow profile and risk appetite. Early planning is essential because lenders consider your tax and super compliance history when assessing applications.

Paying super on payday rather than quarterly means businesses can no longer use super accruals as a short‑term funding source. The amount of working capital “lost” depends on the wage bill, pay frequency and debtor terms. For many SMEs it equates to one to two pay cycles of wages plus super contributions. This article shows how to estimate the working‑capital requirement using simple formulas and highlights funding options. Use the Payday Super Calculator to input your numbers.

Quarterly super payments allowed businesses to hold employees’ super contributions for up to 90 days. Paying super on payday removes that float and requires more frequent cash outflows. This article compares the two systems using real‑world numbers and shows how much working capital SMEs must either fund internally or through finance. A calculator is available at gpsfinance.com.au/payday-super-calculator to run personalised scenarios.

Rising SME insolvencies are already a concern. The RBA reports that company insolvencies have increased in recent years, especially among businesses with fewer than 20 employees in the hospitality and construction sectors. Payday Super will further compress cashflow for small businesses by eliminating the quarterly super float, which research suggests could strain one in five SMEs. While Payday Super does not directly cause insolvency, insufficient planning could accelerate failures. Businesses should model their cashflow, renegotiate debtor terms and explore funding options to mitigate the risk.

From 1 July 2026 employers must pay employees’ superannuation at the same time as wages under the Payday Super regime. This shift compresses working‑capital cycles by removing the quarterly “float” that many SMEs rely on. Super contributions will be calculated on qualifying earnings (QE) rather than ordinary time earnings (OTE), and late payments will attract a redesigned super guarantee charge (SGC) with daily compounding interest. Employers should model the cash‑flow impact, adjust pay cycles, upgrade payroll systems and consider funding options such as working‑capital lines or invoice finance. A free Payday Super Cashflow Calculator can help estimate the impact.

Refinancing tax debt can reduce borrowing costs and free up working capital, but it must be done carefully to avoid new risks. This guide outlines the steps to refinance ATO debt, the legal considerations and how to structure a loan for maximum benefit.

Yes. The ATO can initiate liquidation proceedings to wind up a company that fails to pay its tax debts. It can also issue garnishee notices, director penalty notices and disclose debts to credit reporting bureaus. However, winding up is generally a last resort after other recovery actions fail. Early engagement with the ATO and advisors can prevent escalation.

Setting up a payment plan with the ATO can improve your chances of obtaining finance because it demonstrates proactive management of tax debt. However, lenders still assess the size of the debt, the business’s ability to service both the payment plan and the loan, and the underlying cause of the debt. Payment plan interest is no longer tax deductible from 1 July 2025, making refinancing an attractive option.

Setting up a payment plan with the ATO can improve your chances of obtaining finance because it demonstrates proactive management of tax debt. However, lenders still assess the size of the debt, the business’s ability to service both the payment plan and the loan, and the underlying cause of the debt. Payment plan interest is no longer tax deductible from 1 July 2025, making refinancing an attractive option.