Payday Super: cashflow fix for startups before July

A lot of founders think the “hard part” of superannuation is remembering to pay it. Most companies get this wrong. The hard part is timing.

From 1 July 2026, Australia’s Payday Super reform changes the rhythm of cash leaving your business. Instead of paying Superannuation Guarantee (SG) quarterly, you’ll generally need to pay within seven business days of each payday. For startups that run lean, sell on terms, and already juggle rising wages and input costs, that shift is a quiet but serious working-capital hit.

This matters beyond compliance. It affects how you plan hiring, how aggressively you can spend on customer acquisition, and how you use automation in payroll and finance. If your startup is building with (or buying) AI-powered finance tools—payroll automation, cashflow forecasting, invoice chasing—Payday Super is the forcing function that makes those tools worth it.

One-line reality check: Payday Super doesn’t change how much you owe—it changes how fast you have to fund it.

What Payday Super changes (and the rule that bites)

Answer first: Payday Super brings SG payments forward from quarterly to near-immediate, which removes a de facto cash buffer many businesses relied on.

Under the reform:

• SG contributions must be paid within seven business days of payday (with limited exceptions).
• The ATO will administer the reforms.
• If you miss the deadline, you may face the Superannuation Guarantee Charge (SGC)—unpaid super, interest, and admin fees.
• Late payment fees are not tax-deductible, which makes “catching up later” more expensive than many founders assume.

The Inside Small Business report captured what operators feel in plain English: quarterly super has historically acted as an unofficial cash buffer. James Beeson (Earlypay) described it as a structural shift in payroll cashflow. Christopher White (Pay Australia) pointed out the practical consequence: faster, more frequent outflows—and a one-off working-capital hit roughly equal to a quarter’s contributions.

The simple math founders should actually do

Answer first: Model the cash timing difference, not just the SG percentage.

The SG rate is cited as 12% of ordinary time earnings in the report. You might already accrue this in your accounts, but timing is the issue.

A quick founder-friendly way to estimate the “one-off hit”:

1. Calculate an average quarter of super (even if you pay fortnightly wages).
2. Assume that amount will no longer sit in your bank account until the quarter-end due date.
3. That’s your working-capital gap to fund up front.

Example (simplified):

• Payroll (ordinary time earnings): $120,000 per month
• SG at 12%: $14,400 per month
• Quarterly SG total: $43,200

Under quarterly payments, you effectively held some of that cash for weeks to months. Under Payday Super, you’ll be pushing it out almost immediately after each pay cycle. Your bank balance behaves differently even if your P&L doesn’t.

Why this reform hits startups harder than mature SMEs

Answer first: Startups often run payroll frequently but collect revenue slowly, creating a bigger timing mismatch.

Beeson’s point about a “liquidity mismatch” is exactly what shows up in early-stage businesses:

• You might run weekly or fortnightly payroll (especially with contractors converting to employees, or shift-based teams).
• You might collect on 30–60 day terms (enterprise SaaS, agencies, professional services, wholesale, B2B projects).

When cash arrives later but payroll obligations are due sooner, the stress shows up fast. This is the same pattern that causes “profitable but broke” businesses.

The hidden second-order impact: marketing gets squeezed first

Answer first: When cashflow tightens, founders cut discretionary spend first—and marketing is usually first on the chopping block.

If you’re running lean, you probably separate spending into:

• Non-negotiables: wages, rent, tax, insurance
• Negotiables: tools, travel, experiments
• Discretionary: marketing tests, content, sponsorships, paid social

Payday Super turns part of what felt “negotiable later” into a non-negotiable now. If you don’t plan for it, you’ll end up pausing campaigns at the worst time—right when you need pipeline certainty.

My stance: don’t respond to Payday Super by “doing less marketing.” Respond by marketing with tighter feedback loops and clearer cash discipline.

The AI-in-finance angle: use automation to make cash predictable

Answer first: The best defense against Payday Super pressure is shortening your cash conversion cycle using automation—especially AI-assisted forecasting, collections, and payroll compliance.

This post sits in an AI in Finance and FinTech series for a reason. The reform increases the value of tooling that reduces errors, improves timing visibility, and forecasts cash daily.

1) Payroll automation that reduces compliance risk

Answer first: Automate SG calculation and payment scheduling so the deadline isn’t a human memory test.

With the ATO-administered regime and penalties that aren’t tax-deductible, manual processes become expensive. What to implement now:

• Payroll software configured for SG payable on each pay run
• A workflow that triggers an approval + payment within the seven-business-day window
• Alerts for exceptions (backpay, bonuses, irregular out-of-cycle payments)

Also note the operational change flagged in the report: the ATO’s Small Business Superannuation Clearing House will close from 1 July, with access restricted for new users already. That means your payment pathway needs to be clear well before July.

2) AI cashflow forecasting that models timing, not hope

Answer first: Forecasting should answer “Will we have the cash on payday + 7?” not “Are we profitable this quarter?”

AI-assisted cashflow tools can ingest:

• payroll calendars
• expected SG amounts
• invoice due dates and historical payment behaviour
• seasonality (January can be lumpy for many Australian SMBs)

You’re aiming for a rolling view of:

• next 14 days (paydays + SG deadlines)
• next 60 days (customer payments)
• scenarios (late-paying customer, hiring, campaign ramp)

If your tool can’t model cash at that granularity, it’s not a forecast—it’s a guess.

3) Collections and invoicing systems that shorten DSO

Answer first: The cheapest way to fund Payday Super is to get paid faster.

Before you consider lending, tighten receivables:

• Move more customers to upfront or part-upfront pricing
• Add automated reminders at 3, 7, 14 days overdue
• Use card/PayTo/Direct Debit where possible to avoid “we’ll do it next week” payments
• Make the invoice easy to pay (one-click links, clear references)

If you sell B2B, consider this policy stance: 30-day terms are a privilege for established customers, not a default for new ones.

How to protect your growth budget (without starving it)

Answer first: Re-budget marketing around cash timing and payback periods, not monthly “gut feel.”

Here’s a practical approach I’ve seen work for startups that need leads but can’t tolerate cash shocks.

Re-plan marketing using a “cash-safe” framework

1. Separate brand from performance.

   • Keep brand programs steady but smaller (content, partnerships, community).
   • Put experimentation into performance channels where you can measure payback.

2. Set a max payback period tied to cashflow.

   • If your average customer pays you in 45 days, don’t run campaigns that take 120 days to pay back unless you’ve funded it intentionally.

3. Turn quarterly planning into fortnightly planning.

   • Payday Super effectively shortens your financial cycle.
   • Your marketing cadence should match: review pipeline, CAC, and cash every 2 weeks.

4. Reserve a “compliance buffer” account.

   • Treat SG like GST: money you’re holding temporarily for someone else.
   • A separate account reduces accidental overspending.

A quick checklist for founders before 1 July 2026

• Map every payday from July onward and mark +7 business days as SG due dates
• Confirm your payroll provider supports Payday Super-style workflows
• Decide your payment method after the clearing house closure
• Update your cashflow forecast to include SG timing (weekly/fortnightly)
• Review customer terms and implement at least one “get paid faster” change
• Re-baseline marketing spend against your new cash low points

Common questions founders ask (and straight answers)

“If we’re already accruing super, why would cashflow change?”

Answer first: Accrual accounting doesn’t stop your bank balance from dropping earlier.

You may already record super liabilities, but many businesses effectively held that cash longer under quarterly payments. Payday Super removes that float.

“Is this just a compliance admin headache?”

Answer first: No—this is a working-capital restructure.

As highlighted by industry executives in the report, this is bigger than “update your payroll.” It changes when cash leaves, which changes how aggressively you can hire and market.

“Should we cut marketing until we stabilise?”

Answer first: Cut waste, not growth.

The smarter move is to tighten measurement, shorten payback windows, and prioritise channels that generate leads you can convert quickly.

What to do next: treat Payday Super like a funding event

Payday Super is a policy change, but operationally it behaves like a one-off hit to working capital plus a permanent shift in cash timing. The founders who handle it best won’t be the ones who “work harder.” They’ll be the ones who systemise payroll, forecast cash weekly, and run marketing that pays back predictably.

If you want one action to take this week, do this: calculate your “quarter of SG” number and decide where that cash will come from—higher prices, faster collections, reduced burn, or funding. Waiting until June will force you into bad trade-offs.

What’s your biggest risk area ahead of 1 July—late-paying customers, messy payroll processes, or a marketing plan that takes too long to pay back?