How should SMEs forecast super to avoid payroll stress?

Even profitable businesses can hit a cash flow crunch if super isn’t planned properly. Between weekly pay runs, quarterly lump sums, new hires and late-paying clients, a routine payroll obligation can easily feel like a scramble.

The good news? With a little planning, you can stay ahead of obligations and keep cash flow steady even as your business grows. Here’s how to forecast your super costs per pay run and avoid getting caught short.

A step-by-step guide to forecasting super

Start with the current super guarantee rate

Super is a percentage of your employees’ ordinary time earnings (OTE), which currently sits at 12% [1]. 

This is your starting point, and it’s important you get it right, or your forecast will be immediately off. Our tip? Always check the ATO’s website for any updates – even if you’re 99% sure the percentage hasn’t changed.

Equally as important is getting the OTE right so you don’t end up under- or over-estimating super costs [2].

Once you’ve confirmed your employees’ OTE, multiply it by the current super rate to get the minimum contributions you’ll need to make each month or quarter.

Add growth assumptions

To forecast realistically, you need to account for planned changes in your payroll. So, ask yourself:

• Are there new employees joining the team? Each new hire increases your super obligations immediately.
• Is a busy period coming up? It might mean overtime or extra shifts.
• Are bonuses or commissions planned? Factor in any payments linked to ordinary hours.
• Are wage increases scheduled? Even small raises add up across your team.

Consider timing changes

With payday super coming in a few months, timing becomes a crucial part of super (and payroll) forecasting. 

Until 1 July 2026, super leaves your account as a single quarterly payment. But after that, it’ll go out with each pay run, which means your cash flow rhythm will change. 

If payroll timing (when you pay staff) doesn’t match revenue timing (when clients, customers, or contracts pay you), you can end up short on cash… even if profitable. In other words, payday super moves with every pay run, so forecast each cycle, or you risk running short.

The monthly vs quarterly reality check

Steph runs a small marketing agency and has an employee with a monthly wage of $120,000. She’s forecasting super at a rate of 12%.

• Pre-payday super: $120,000 × 3 months × 12% = $43,200 (paid at quarter-end)
• Post-payday super: $120,000 × 12% = $14,400 (paid monthly with wages)

Even though the total super owed is the same, spreading payments across each month changes how much cash needs to be on hand at any given time.

Stress-test your forecast

Forecasts are rarely – if ever – 100% accurate. And in reality, they’re not just about calculating totals but also preparing you for the unexpected, and that’s where stress-testing comes in.

Identify key risk points

Look at your projections and ask yourself:

• Are there any clients who often pay late and could delay cash inflows?
• Are you planning new hires or expecting overtime spikes that will increase super obligations?
• Any unexpected costs that could pop up, like equipment repairs or seasonal expenses? 

Even approximate estimates help here. You’re identifying these risks ahead of time, which means you can plan a buffer or funding before a shortfall actually happens.

Run “what-if” scenarios

Based on those risk points, think of 1-3 realistic scenarios and see how your forecast holds up. A couple of examples:

• Late client payment: If a client who usually pays late delays a $20,000 invoice past payroll, calculate how that gap would impact your super and cash flow for that pay run.
• Overtime spikes: If winter is busy and employees work overtime, estimate how the extra hours per employee would increase wages and super contributions.

For each scenario, calculate how much extra cash would be needed, how long you’d be short for, and which pay runs or dates are most at risk.

Again, no need for exact figures – rough estimates should be enough to plan accordingly and understand whether you can cover the gaps using existing cash reserves or might need temporary funding.

⚠️ Stress-testing isn’t a one-off. As your business evolves and cash flow fluctuates, what once worked may no longer be enough. So, every month or quarter, revisit your forecast and confirm it’s still relevant and up-to-date.

Warning signs your business isn’t forecasting super properly

Forecasting super is key to keeping your cash flow steady and avoiding last-minute panic. Needless to say, it needs to be as accurate and reliable as possible. Here are a few common red flags that it might not be:

You “figure it out” near the due date

Waiting until the last minute to calculate super is a recipe for disaster. It means you’re reacting instead of planning and can easily lead to late payments and penalties.

Fix it: Build super calculations into your regular payroll routine and forecast each pay run in advance so contributions are accounted for before payday.

You dip into tax savings to cover super

When cash runs tight, some SMEs temporarily dip into GST, tax, or savings accounts. Though it might feel harmless, repeated shortfalls can quickly snowball, especially once super is due every pay run.

Fix it: Treat super as a separate, non-negotiable outflow and consider creating a dedicated cash reserve for it.

You rely on one major debtor payment to fund it

Relying on a single invoice to cover super is risky because if there are any delays, your payroll could be underfunded, even if the business is profitable overall.

Fix it: Create a buffer or look into flexible funding options like a line of credit, so super can be paid on time regardless of when payments come through.

You’ve paid the super guarantee charge before

If you miss a super payment, the ATO charges you a super guarantee charge, which you pay on top of the outstanding super you owe. If this has happened to you, it’s a clear sign your business miscalculated super in the past. 

Fix it: Review your forecasting process, stress-test for different scenarios, and track OTE, super rates, and payroll timing closely to prevent future penalties.

When funding can smooth the pressure

Even with careful forecasting, timing gaps happen. And while finance isn’t a substitute for good planning, it can be a valuable safety net, particularly during:

• Rapid hiring phase: A line of credit or overdraft can cover the extra super and payroll expenses until revenue catches up.
• Seasonal revenue gaps: A line of credit, overdraft, or business term loan can help bridge slower periods without interrupting pay runs.
• Waiting on large invoices: If a significant client payment hasn’t arrived yet, invoice finance can prevent cash shortfalls while you wait.
• Bridging ATO timing pressure: Upcoming tax obligations, including super changes, can create timing stress. Working capital finance can give you breathing room to meet obligations without disrupting operations.

Used strategically, these loans can help keep payroll on track – super and all. Get a quote with Valiant today and make payday stress-free.

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