Payday super likely to hinder cash flow, warns expert
Australian businesses must implement new strategies to access working capital ahead of payday super, according to a cash flow expert.
Proposed changes to the superannuation guarantee (SG) contributions by the government will require SMEs to plan and strategise payments to abide by the new obligations.
Under the SG contributions, employers would be required to pay their employees super guarantee at the same time as salary and wages rather than on a quarterly basis.
In 2020–2021 it was estimated that $3.6 billion worth of super went unpaid by Australian businesses.
Treasury said the system was designed to make effective changes to the super guarantee framework by incentivising employers to quickly disclose and rectify any instances of unpaid super.
“It will increase the consequences for employers who don’t pay on time and apply bigger penalties for employers who repeatedly do the wrong thing,” Treasury said.
OptiPay CEO Angus Sedgwick said Australian SMEs would need to find an alternative source of working capital before the new implementation on 1 July 2026.
“We often see SG contributions used as a source of working capital for many Australian small to medium sized businesses, so they’ll need to get ahead of this change and put new strategies in place to support cash flow,” he said.
“We have already seen an increase in the B2B businesses requesting invoice financing facilities in preparation for the change and we expect to see those requests continue for the next 12-18 months.”
According to OptiPay, there was a 10 per cent increase in enquiries since the SG changes were announced in May.
Business owners would be held personally liable when SG is unreported and unpaid more than seven days after an employee’s payday.
According to Sedgwick, the ATO swapped monthly SG collection to minimise employees’ losses as more Australian businesses entered insolvency and racked up unpaid tax debts and unpaid super.
Sedgwick said now is the time for business owners to change their ways.
“Business owners need to be proactive in seeing the change coming and finding alternate solutions for accessing working capital, particularly during periods of high growth or seasonal sales fluctuations.”
Though Sedgwick and business owners said they believed SG contributions would be tough on SME cash flow, Treasurer Jim Chalmers said it would be revolutionary for the country’s super system.
“Paying super on payday is part of the government’s efforts to ensure Australians earn more, keep more of what they earn and retire with more as well,” Chalmers said.
“This will strengthen Australia’s superannuation system and help deliver a more dignified retirement to more Australian workers.”
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