Funding new hires: covering wages until the extra work pays

At some point, the owner can’t do it all. Jobs are being turned away, the books are done at midnight, and the business is only as big as one person’s week. Hiring is the milestone that changes that. It’s also a cash flow test, because a new employee costs money from their first shift and usually takes weeks — sometimes months — to pay for themselves.

What does a new hire really cost?

The hourly rate is only the start. Before you work out how much finance you might need, add up:

Cost	Notes
Wages	At least the relevant award minimum; check Fair Work’s pay tools
Superannuation	The super guarantee is 12% from 1 July 2025
Workers compensation insurance	Required for employers; arranged through your state scheme
Leave entitlements	Annual and personal leave accrue for permanent staff
Equipment, uniforms, tools	Sometimes a vehicle — see vehicle finance
Recruitment and training	Including your own time
Payroll software	Single Touch Payroll reporting is required
Payroll tax	Only above state thresholds — check your state revenue office

Business.gov.au’s guide to hiring employees lists the core obligations: register for PAYG withholding before your first pay run, report through Single Touch Payroll, hold workers compensation insurance, give the Fair Work Information Statement, and provide a super choice form within 28 days of the employee starting.

Payday Super changes the timing from 1 July 2026

Until mid-2026, many small employers paid super quarterly. From 1 July 2026, Payday Super means super is paid alongside wages. The ATO says a contribution is on time if it’s received by the employee’s fund within seven business days after payday.

For cash flow, that’s a real shift: the money you might once have held for up to three months now leaves the account every pay cycle. When you’re forecasting the cost of a new hire, treat super as part of every payday, not a quarterly bill.

Why short-term finance usually fits

A new hire is an ongoing cost, but the gap you need to bridge is temporary — the period between paying them and the extra revenue they generate. That points to flexible, short-term facilities:

• Business line of credit: draw what you need for the first months of wages, repay as the new work is invoiced and paid.
• Working capital loan: a defined amount over a shorter term to cover the ramp-up.
• Invoice finance: if the new hire lets you take on more B2B work, the invoices themselves can fund the wages.

Using a five-year loan for a three-month gap means paying for that gap long after it’s closed. Flexible facilities also let you stop drawing once the new hire is paying their way, so you’re not carrying borrowed money you no longer need. If the hire is part of a bigger expansion — a new site, a second vehicle, more equipment — those larger pieces can sit on their own longer-term facilities while the wages gap stays on something short and flexible.

Weighing up a hire? Tell us about the role and the work it unlocks and a specialist will suggest the right facility — no credit check to enquire.

Hire against demand you can see

Lenders, and sensible owners, like to see that a new hire is backed by real work:

• A waiting list or jobs you’re currently turning away
• Signed contracts or regular customers wanting more
• Equipment sitting idle for want of someone to run it
• Your own hours being the bottleneck on growth

Illustrative example: A bakery owner is starting at 3am six days a week and turning down wholesale orders from two local cafés. She hires a full-time baker, funded for the first three months through a line of credit. The wholesale orders she can now accept cover the baker’s wages and super by month four, and she repays the drawn amount from that extra income.

Plan the first 90 days

• Budget the ramp-up. New staff rarely run at full speed from day one.
• Book the work in advance so the new hire is productive quickly.
• Set up payroll properly — STP-enabled software, super fund details, award classification.
• Watch the cash weekly for the first few months.

Our guide to hiring your first employee breaks down the cash costs in more detail, and the growth finance page looks at hiring as part of a wider expansion.

Employee, contractor or casual?

How you engage someone changes the costs and the obligations. Permanent employees accrue leave and need the full set of payroll obligations. Casual employees attract a casual loading in place of some entitlements and get the Casual Employment Information Statement. Genuine contractors invoice you and handle their own tax and super in most cases — but the line between employee and contractor is set by the law, not by what you call the arrangement, and getting it wrong can be expensive. The Fair Work Ombudsman’s hiring guidance is the place to check. Whatever you choose, cost it out properly before you decide how much finance the hire needs.

Get the hire funded

Tell us about the role, when they start and the work they’ll make possible. A real person will help you choose a facility that covers the gap without locking you into more than you need. There’s no credit check to enquire, your enquiry isn’t distributed to a pile of lenders, and realistic numbers on the form mean we can point you to the right option first time. Check your options for growing the team.