The start of Australia's new financial year ushers in changes to the country's superannuation system.
Starting 1 July, employers are now required to pay employees' superannuation at the same time as wages, rather than making quarterly contributions.
While the super changes are expected to benefit employees, they also mark a significant shift in how small businesses manage payroll, cash flow and working capital.
"This is one of the most significant cash flow changes small businesses have faced in over a decade," Rebecca del Rio, deputy chief executive officer APAC and global chief revenue officer at non-bank lender Bizcap, told Australian Broker. "For years, the gap between paying wages and remitting super each quarter has quietly acted as a working capital buffer. That buffer is being removed, and the timing of it matters. Most small businesses are already running on three months of cash or less, which is the very bottom of what’s considered healthy."
The reforms arrive at a challenging time for SMEs, with many already grappling with elevated interest rates, persistent cost pressures and global economic uncertainty that continues to weigh on business confidence.
"Cash flow has been the number one challenge for SMEs for some time, alongside rising costs, slower customer payments and broad economic uncertainty," del Rio said. "Payday Superannuation adds another pressure by shortening the time businesses have access to their own working capital.
"For many businesses, the total super bill doesn't change," she continued. "But bringing it forward means cash leaves the business much sooner and far more often."
For brokers, the changes are expected to spark more conversations with small- and medium-sized (SME) clients about cash flow planning, working capital and finance solutions as businesses adjust to more frequent super payments.
Australian Broker spoke with lenders and industry participants to find out what brokers and SMEs need to know as the new payday super regime takes effect.
The payday super reforms are designed to make it easier for Australians to track their retirement savings while tackling the persistent problem of unpaid and underpaid super. The federal government estimates that workers miss out on billions of dollars in super each year. When announcing the reforms in 2023, Treasurer Jim Chalmers said they would crack down on the more than $3 billion in unpaid super annually.
More recently, examples like the recent liquidation of Dashdot, an Australian property buyer's agency and investment advisory firm, serve as a cautionary tale and an example of why the reforms may be necessary. Dashdot entered voluntary liquidation in May, with more than $16.5 million in debts, leaving employee entitlements, including superannuation, unpaid.
"They had monies owed to staff, which would have included unpaid superannuation payments," said Ben Kingsley, founder and managing director or Melbourne-based Empower Wealth Advisory. "So these [reforms] just help improve that."
While the changes simplify compliance over the long term, they will require businesses to rethink cash flow management, particularly those that have traditionally relied on holding super payments until quarterly deadlines.
That means cash flow is more important than ever.
"The first step is to map out how the new timing hits your specific pay cycle," said del Rio.
Businesses will need to ensure they have sufficient funds available every pay cycle, rather than setting aside super contributions over several months. Working capital also becomes a higher priority. SMEs with tight or seasonal cash flow may seek overdrafts, business loans, or other working capital solutions to manage more frequent payment obligations.
"Flexible working capital, and lines of credit in particular, are well-suited [lending products for businesses trying to adapt], because they match the shape of the problem," said del Rio. "The challenge here isn't a one-off cost; it's a recurring timing gap between when super leaves and when revenue arrives. A revolving facility lets a business draw what a given pay run needs and repay as receivables land, rather than taking on a larger lump-sum loan upfront.
"The key is to size it and use it so it reads as a buffer," she continued. 'It’s enough headroom to bridge a pay run and its super cycle, drawn when timing demands and repaid as cash comes in. Used that way, an established facility gives a business the confidence it can always meet payroll and super without disrupting day-to-day trading.
"My broader advice is to sort funding before you need it," del Rio added. "Putting a flexible working capital facility or a revolving line of credit in place gives you breathing room through the transition, rather than scrambling once a tight week collides with a super run. It's far easier to arrange access when you’re not under pressure."
Compliance risks also increase. Employers that miss or delay super payments could face a late payment charge, interest on the unpaid amount and an administrative penalty. The Australian Taxation Office (ATO) can also impose additional penalties of between 25% and 50% of the unpaid super guarantee charge, depending on an employer's compliance history.
In addition, companies may need to update their payroll systems to comply with ATO guidelines.
Del Rio recommends SMEs "review their payroll system and confirm they can pay and report super on every run, update your cash flow forecasts and make sure they're clearing house can get contributions to the funds inside the window.
"There’s one detail worth flagging to clients that catches people out: July is a double-hit month. The final quarterly super guarantee payment for the April to June period is still due on July 28, at the same time as the first Payday Superannuation runs are going out," del Rio explained. "So businesses need to be ready to fund both at once. For brokers, this is one of the clearest reasons in years to get on the front foot with clients about cash flow and working capital, well before businesses feel the squeeze.
"For well-prepared businesses with steady income, the transition should be manageable," she continued. "But the data suggests most aren't there yet. A large share of SMEs have made no cash flow preparations at all, and the smaller the business, the less prepared it tends to be. Those already operating with tight margins will feel the changes the fastest."
The reforms create an opportunity for brokers to strengthen relationships with SME clients beyond traditional lending conversations. Brokers can help clients review cash flow forecasts, assess working capital requirements and identify finance solutions that support ongoing operations.
Nick Anderson, founder and managing director at Perth-based Sonam Capital, said brokers "need to make sure their clients are paying their employees' super, and creating systems that make it nice and simple to do it, and making sure they're filing appropriately.
"It's about embedding yourself in the process with your clients to make sure that these changes are getting done and strengthening the relationships with your clients," he added.
In addition, seasonal business, such as hospitality, construction, retail and agriculture, where revenue can fluctuate throughout the year, may need additional funding flexibility to meet payroll and super obligations during quieter periods.
For non-bank lenders and specialist SME financiers, the changes could also drive greater demand for flexible funding products designed to help businesses manage short-term cash flow without disrupting day-to-day operations.
