Wages finance: paying your crew when the invoices are still out

A plumber can chase a late invoice for a month. A crew cannot wait a month for a pay. That asymmetry is the whole reason wages finance exists: the people who work for you are paid on a calendar, and the customers who owe you are paid on theirs.

What is wages finance?

It is working capital used to cover payroll while money you are owed is yet to arrive. It is not a special product so much as a purpose: you borrow to bridge the weeks between paying the crew and being paid by the customer, then repay from the receipts.

Sized on turnover and bank statements, unsecured amounts typically run from $5k to $500k. For bigger gaps, property security can lift the limit, as explained on our secured loans page.

What does payroll really cost you?

More than the figure on the pay slip.

Item	Why it matters
Wages	The base, set by your award or agreement
Superannuation	An additional cost due on top
Payroll tax, where it applies	Varies by state and level of wages
Workers compensation	An insurance cost tied to wages
Leave accruals	A liability that builds over time
Tools, vehicle and phone	Costs of having someone on the job

Add them up for one person and the weekly cost is often noticeably higher than the pay rate times the hours. A wage gap should be sized on the full cost, not just take-home pay.

How does Payday Super change the timing?

The ATO says Payday Super starts on 1 July 2026. From that date, super guarantee contributions must reach each employee’s fund within 7 business days of payday, with some exceptions such as for new employees.

For a trade business that used to pay super quarterly, that is a real shift. Super becomes a regular, frequent cash outflow, not a quarterly lump. If your pay cycle is already tight, that smoother-but-more-frequent outflow needs planning. Check the ATO’s guidance for the detail that applies to you, and talk to your payroll provider or accountant about timing.

How do I measure a wage gap?

Lay out two columns for the next eight to twelve weeks.

1. Down one side, every pay run with its full cost.
2. Down the other, every invoice with the date you realistically expect it to be paid, not the date it is due.
3. Find the weeks where the first column runs ahead of the second.
4. The largest cumulative shortfall is the size of your gap.

An illustrative example, not a real business. A scaffolding firm pays five workers weekly. Its biggest customer pays about forty-five days after invoice. In a busy stretch the gap between wages out and invoices in builds over several weeks, then shrinks when the large payment lands. The firm sizes a facility on the peak of that gap, with a modest cushion, and sets repayment to align with the large customer’s pay pattern.

The cash flow gap planner lets you test it with your own numbers. If you want to see what wages funding could look like, send a short enquiry.

Is wages finance the right tool?

It is right when the gap is temporary and the receipts are real. It is wrong when the business is losing money, because borrowing to cover a loss postpones the problem and adds repayments to it.

Test it with one question: when the invoices are paid, does the business have enough to repay and still cover the next payroll? If yes, the gap is a timing gap. If not, look at margins, pricing and costs before borrowing.

Subcontractor payments are a close cousin. Our page on subcontractor wages deals with the specifics of paying people who are not employees.

What are the alternatives to borrowing?

• Shorter payment terms. Moving from thirty to fourteen days changes everything.
• Progress claims and deposits. Collect more money earlier in the job. Our page on progress payment gaps covers it.
• Invoice-based funding. Releasing cash against specific invoices.
• A standby limit. Cover that is there when needed and idle when it is not.

Often the best answer is a mix: tighten terms where you can, then finance the remaining gap.

What does a lender want to see?

Evidence that the gap is real and the receipts are coming: recent bank statements, a list of outstanding invoices or contracts, and a clear amount. They may ask who your main customers are and how they pay. A plain description such as “four invoices from two commercial builders totalling the gap, due in six weeks” is persuasive.

Does a new hire change how much I should borrow?

Yes, and the effect is bigger than most tradies expect. A new employee costs wages, super, insurance, tools and often a share of a vehicle from their first day. The revenue they produce takes weeks to show up in the bank, because the work has to be done, invoiced and paid first. A hire made without a cash plan is one of the commonest reasons a healthy business suddenly feels stretched.

Before you hire, work out how many weeks of full cost you can carry before the person pays for themselves, and decide whether reserves or finance will cover that stretch.

Keep the crew paid

Paying people on time is the baseline of a good trade business. Crews stay when pay is reliable, and a reliable pay is easier with a plan for the gap.

An enquiry takes about a minute and is not a credit check at that stage. We do not blast your details to a stack of lenders, so there is no storm of calls. A real person reads your situation and talks through the options. Please complete the form accurately, particularly the amount and what the funds cover, so we match you properly the first time. Plan your payroll cover here.