Superannuation and cash flow: What hiring someone costs beyond wages

Hiring someone isn’t just about agreeing on a salary; it’s about understanding the full financial impact on your business. From mandatory contributions to optional perks, the true cost of an employee goes well beyond their base pay. 

In this article, we’re focusing on one of the largest pieces of the employee cost pie: superannuation.

Understanding total employment costs in Australia

In Australia, it’s estimated that the true cost of an employee is 25-35% higher than their salary [1]. So what exactly goes into this true cost?

Total employment costs are the sum of an employee’s base salary, plus other mandatory and optional expenses, including:

• Superannuation
• Payroll tax
• Any commissions, bonuses, or overtime pay
• Worker’s compensation insurance
• Leave entitlements
• Professional development and training
• Recruitment (like job ad costs or recruitment agency fees)
• Equipment
• Optional benefits (like gym memberships, wellbeing allowances, or extra annual leave)

What is superannuation, and why is it important for employers?

Superannuation is a long-term retirement savings plan that you, as the employer, contribute to for each of your employees [2]. It’s a percentage of their salary—which, as for November 2025, sits at 12%—known as the superannuation guarantee (SG).

You pay super to all employees aged 18 and over (including directors and some contractors). For employees under 18, you only have to make super contributions if they work for you more than 30 hours a week.

Not sure if an employee is eligible for super? You can use the ATO’s SG eligibility decision tool to confirm.

When are super payments due?

Right now, super payments are made at least 4 times a year, from the date an employee starts working for you. Due dates are as follows [3]:

• Q1 (1 Jul-30 Sep): Super due 28 Oct
• Q2 (1 Oct-31 Dec): Super due 28 Jan
• Q3 (1 Jan-31 Mar): Super due 28 Apr
• Q4 (1 Apr-30 Jun): Super due 28 Jul

You can also make contributions more frequently. The most important thing is that, by that quarter’s due date, the total SG amount is paid to the right super fund.

What happens if I miss a super due date?

If you miss a super due date, you need to lodge a super guarantee charge statement within a month of the quarterly due date and pay the charge for the outstanding super you owe [4].

If you make an SG payment after the quarterly due date, that’s considered a late payment—and it will be used automatically to pay any super obligation you may have in the current quarter. This means you should treat it as a missed payment.

How do super obligations affect my business cash flow?

In a nutshell, your super obligations impact your cash flow because they’re a recurring expense you need to account for and make sure you can cover. Fail to plan for super contributions, and they can easily sneak up on you and put pressure on your working capital.

Super obligations affect your business cash flow because:

• They’re a non-negotiable expense. You have to pay the 12% for each employee, which makes true payroll costs higher than what you pay in wages.
• Missed payments mean extra charges. If you don’t make a payment, you could face the super guarantee charge, which is more expensive and not tax-deductible [5].
• They reduce your buffer during busy periods. Hiring seasonal staff or paying for overtime spikes your wage bill, and your super liability climbs with it.
• They can be trickier to manage during slow seasons. Even when your revenue dips, your super bill doesn’t. Although you have less cash coming in, you still have to cover these contributions, which can put pressure on your working capital.

What are some strategies to avoid last-minute super payment stress?

Super doesn’t have to catch you off guard. These strategies can help you avoid scrambling at the last minute:

• Budget for super every month. Set aside a portion of your revenue each month for super obligations, just like you would with any other recurring expense.
• Use payroll software or outsource payroll altogether. Payroll software automates calculations and reminders for super payments. Alternatively, you can hire a bookkeeper or payroll service to manage obligations, which can be especially helpful if you have multiple employees or complex arrangements.
• Align cash flow with super deadlines. Track your income and outgoings against super due dates and adjust your payment schedule where possible.
• Keep a buffer fund. Make sure you always have a small reserve in your account—even 5-10% of your projected quarterly super can give you peace of mind and prevent last-minute headaches. 
• Prepare for same-day super changes. With the cadence of super contributions increasing, you need to plan your cash flow extra carefully to cover super alongside wages each pay cycle. Keep an eye on our blog for more tips to help your business stay financially ready for payday super.

What finance options exist to cover super and wages?

When your business needs short-term cash to meet super or payroll obligations, there are several flexible options:

• Business lines of credit offer flexible funding that you can tap into whenever you need it, making them perfect for bridging short-term cash flow gaps, especially when super or payroll deadlines are looming.
• Short-term business loans provide a lump sum of cash for immediate needs, which you typically pay back over a set period with predictable repayment amounts.
• Invoice financing lets you access cash that’s tied up in unpaid invoices, so you can cover super and wages without having to wait for your clients to pay.
• Overdrafts are linked to your business bank account, giving you short-term cash flexibility, and you only pay interest on the amount you actually use.

Need a hand keeping payroll on track? Valiant can help. Our platform compares loans from over 90 lenders to connect you with ones that work with your unique needs.

We manage the paperwork, handle the application, and help get your funding sorted, so you can focus on running your business without the stress. Get a quote today.