The account is short and wages are due: what comes first

There are few feelings in business worse than checking the account on a Tuesday and knowing Thursday’s pay run won’t clear. Your team has rent and groceries too. The temptation is to scrape it together any way you can — including from money that isn’t really yours to use. This page is about covering payroll without creating a bigger problem behind it.

What are my obligations on wages?

The Fair Work Ombudsman says employers must pay employees at least monthly for the work they do. Many awards and agreements require weekly or fortnightly pay, so your actual obligation may be tighter. Late or short payments can lead to disputes, Fair Work involvement and — very quickly — resignations.

Since 1 July 2026, payday super also applies. Super must reach each employee’s fund within 7 business days after the payday. So a payroll gap is now a super gap a week later. Our page on unpaid super covers what happens if that slips.

What shouldn’t I do to cover wages?

Some fixes feel sensible in the moment but make things worse:

Tempting fix	Why it backfires
Paying net wages but not remitting PAYG withholding	Builds a debt covered by the director penalty regime
Skipping super this payday	Triggers the super guarantee charge and director exposure
Using GST collected for the next BAS	Creates a BAS you can’t pay in a few weeks
Stacking several short-term merchant advances	Daily repayments can drain the account faster than it fills
Paying some staff and not others without explanation	Damages trust and can breach obligations

The first two are the most dangerous for directors. Unremitted PAYG withholding and super are exactly what a director penalty notice targets.

What can I do in the next 48 hours?

1. Work out the exact gap. Gross wages, withholding and super — not just the net pay figure.
2. Chase what you’re owed. A phone call to your three largest debtors can move money faster than any lender.
3. Check existing facilities. An undrawn overdraft or line of credit may cover it outright.
4. Talk to your team if a payment will be late. Give a specific date and keep it.
5. Arrange funding for the gap. If the business is sound and the gap is timing, short-term funding is the clean answer.

If you’d like help with the last step, start a quick enquiry and a lending specialist will look at your turnover and statements. No credit check is run when you enquire.

What funding covers a payroll gap?

• Unsecured or cash-flow funding, generally between $5,000 and $500,000, assessed mainly on turnover and recent statements. It’s the usual fit for payroll. More on unsecured rescue funding.
• A line of credit, drawn for payroll and repaid when debtors pay, then available again. Good for seasonal businesses with predictable dips.
• Property-secured loans, $20,000 to $5,000,000, where the payroll gap is one symptom of a larger backlog of ATO debt and creditors.

What a lender will want to understand is why the gap happened. A client paying 60 days late is a timing problem. A business losing money every month is a structural one, and more debt alone won’t solve it.

An illustrative example

Illustrative only. A Geelong labour-hire firm places staff with a large manufacturer on 45-day terms, but pays its own workers weekly. When it wins a second contract, the wages bill doubles before the first invoices are paid. Rather than delay PAYG withholding, the director arranges an unsecured facility sized on the firm’s turnover. Wages, withholding and super are all paid on time, and the facility is repaid as the manufacturer’s invoices come in.

Is this a one-off or a warning sign?

Ask yourself honestly:

• Has this happened before in the last six months?
• Are you paying suppliers late to make payroll?
• Are the ATO or other creditors already chasing?
• Have your margins shrunk while costs have risen?

If you’re answering yes, read our guide to early warning signs of cash trouble, and use the which-debt-first sorter to see the full picture. Several pressures at once may call for a consolidation rather than a quick top-up. Our several creditors at once page explains how to prioritise.

What should I say to staff if pay will be late?

If there’s any chance a payment will be late, tell affected staff before payday, not after. Keep it short and honest: what’s happened, exactly when they’ll be paid, and that super and tax will follow correctly. Then meet that date without fail. Staff can usually cope with a clear one-off delay; what they can’t cope with is uncertainty. Better still, arrange the funding now so the conversation never needs to happen.

Want to make this payday without the fallout?

Paying your people on time is worth protecting. If the gap is about timing rather than a business in decline, funding it is a sensible, grown-up decision — far better than borrowing from the ATO without asking.

The enquiry takes about a minute. There’s no credit check involved in a first enquiry, and your details aren’t scattered across a list of lenders. A real person looks at your turnover and the size of the gap and calls you. Please enter the numbers accurately, including gross wages and super, so we can size the facility properly first time.

See if we can help you cover payroll →