Covering Payday Super and payroll with property equity

For years, many employers ran a quiet, unofficial overdraft: super for the quarter sat in the business account until the due date arrived the month after. Payday Super ended that. Since 1 July 2026, super leaves the business with every pay run.

For a profitable business that is a one-off reset, but it can bite hard. The money that used to sit in the account for weeks now goes out within days, the changeover month brought quarterly and payday obligations together, and any super already in arrears has become more urgent. If the business or its owners hold property with equity, a secured loan can absorb the reset while the business adjusts.

What changed with Payday Super on 1 July 2026?

The ATO and the Fair Work Ombudsman set out the new rules:

• Super is paid each payday. Contributions are calculated on qualifying earnings for each pay period and paid with wages, rather than quarterly.
• 7 business days. The ATO says super must be received by the employee’s fund no more than 7 business days after the day you pay qualifying earnings.
• New employees. Fair Work notes that a new employee’s first contribution has 20 business days.
• Faster fund processing. Funds now have 3 business days to allocate or return a contribution, down from 20.
• Clearing house closed. The ATO says the Small Business Superannuation Clearing House is no longer available.
• The changeover. The final quarterly payment, for the June 2026 quarter, was due by 28 July, while July pay runs were already under the new rules.

Why does Payday Super squeeze cash flow?

Before 1 July 2026	From 1 July 2026
Super for a quarter due the month after the quarter ended	Super due within 7 business days of each payday
Weeks of super held in the business account	Days at most
Errors found at quarter end	Errors show up pay run by pay run
SG statement lodged by the employer for late super	ATO assesses the charge itself

The shift is permanent. The business needs a larger cash buffer from now on, sized to its payroll cycle. For most firms the buffer builds over a few months of trading; the squeeze is getting there without missing super, PAYG withholding or a supplier along the way.

What happens if super is paid late under Payday Super?

The ATO describes a new super guarantee charge for paydays from 1 July 2026. It is made up of:

• the unpaid super for each employee;
• notional earnings, which is interest on the unpaid super;
• an administrative uplift, to cover enforcement costs;
• any choice loading, where choice of fund rules were not followed.

The ATO issues a notice of assessment, and the charge is due on the day the assessment is made. If it is still unpaid 28 days later, a Notice to Pay follows, and a late payment penalty applies if that is unpaid after a further 28 days. The ATO says the charge is now tax deductible, but general interest charge on late payment and penalties are not.

The super guarantee charge is also covered by the ATO’s director penalty regime, so unpaid super can become a personal problem for directors. See our guide to director penalty notices.

Is borrowing against property the right fix?

It depends on why cash is short.

It usually suits a business that:

• is profitable but lost its quarterly float overnight;
• has super or PAYG arrears it can clear in one hit, then keep current;
• is funding a payroll build-up for a signed contract or seasonal peak;
• has a clear exit, such as a large debtor payment, a bank facility, or a property sale.

It usually does not suit a business that:

• cannot meet wages and super from trading month after month;
• would use the loan to delay a problem rather than fix it.

The ATO says that in the first year, to 30 June 2027, it will focus on helping employers transition and will target employers who are not trying to adjust. Getting current quickly is the best position to be in.

What does a Payday Super funding loan look like?

Illustrative example: a Geelong metal fabrication business with 40 staff pays wages weekly. Before July it held about two months of super in its account at any time. Since the change, that cash has gone, and two slow-paying builders have left it behind on super and PAYG withholding. The directors own the factory, worth about $2.4m with $900k owing to a bank. A $350k second mortgage behind the bank clears the super and ATO arrears and adds a cash buffer for weekly pay runs. Interest is capitalised over twelve months, so there are no repayments during the term. The exit is a renegotiated bank facility once two clean BAS periods show the business back on an even footing.

The loan did not paper over losses; it funded a one-off reset in a business that was making money.

How does the process work, and how fast?

1. Enquiry. Tell us the property, what is owing on it, and the super, PAYG or payroll figure you need to cover.
2. Specialist call. We confirm the amount, structure and exit.
3. Indicative terms, then the Letter of Offer. You see how interest will be prepaid or capitalised.
4. Documents and settlement. Arrears can be paid direct to funds or the ATO at settlement.

Once documents are in, money can be possible within 24–48 hours, so arrears can be cleared before an assessment lands. For the structure, a second mortgage over business premises is common; our prepaid or capitalised interest page explains how payments are deferred. Manufacturers and other labour-heavy firms can see more on our manufacturing and industrial page.

What documents will be needed?

• Photo ID for borrowers, directors and security owners
• Property details and statements of what is owing on the title
• Payroll reports showing wages and super per pay run
• A current ATO statement of account, if arrears exist
• Evidence of the exit: debtor list, signed contracts, bank correspondence

If tax debts are part of the picture, also read paying an ATO debt with property equity. When you are ready, tell us the payroll gap you need to close.

Key terms

• Qualifying earnings: the earnings super is calculated on under Payday Super, including ordinary hours payments.
• QE day: the day qualifying earnings are paid; the 7-business-day clock starts here.
• Super guarantee charge: the ATO-assessed amount payable when super is late or short.
• Exit: how the loan is repaid, such as a bank facility or a large debtor payment.

Payroll under pressure? See if you qualify

There is no credit check when you first enquire, and a real specialist reads your enquiry rather than forwarding it to a string of lenders. Our lending partner fundU lends directly against the property, with no formal valuation required.

Be clear about the property, what is owing on it, the amount you need and how the loan will be repaid. Accurate answers get the right answer first time. For broader options, see short-term business loans. Start your 60-second enquiry.