iscoverModelling from software provider Employment Hero suggests that small and medium-sized businesses will require an additional $124,000 in working capital, on average, to meet the government’s new Payday Super rules.
SMBs will need extra $124k to meet Payday Super rules, says Employment Hero
18 July 2025
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9 minute read
Last week, Employment Hero released modelling – calculated on the average employer size and the average employee salary, according to the provider’s data, as well as current payroll cycles versus the increase in the superannuation guarantee (SG) – which found that SMBs will require an extra $124,000, on average, in working capital to meet the new Payday Super rules.
This is, the provider said, a “seismic shift” in payroll and compliance requirements due to take effect in less than 12 months.
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While Employment Hero noted it supports the intent of Payday Super, it said legislation is needed to account for how businesses actually operate, so they are not overloaded with unfair risk or cost that could work against the policy objective.
The provider’s CEO Ben Thompson said Payday Super presents a huge opportunity for all Australians, but currently presents an untenable risk for small and medium-sized businesses.
“Payday Super could be the biggest positive change to super since its introduction, but it must be done in a way that doesn’t break small businesses or cost Australians their jobs. Without changes to SuperStream, payments infrastructure and proposed penalties, we risk a system where small businesses are punished for delays outside their control, and that’s simply unfair,” he said.
“That’s why we’re doing everything we can to support SMBs through this change, including advocating for changes that will reduce the risk of insolvency for SMBs and in tandem, building solutions that are going to make it easier for employers to be compliant, regardless of where the legislation or infrastructure change lands.”
The reform will require employers to pay the SG within seven calendar days – a 75 per cent decrease in leeway to make payments. According to Employment Hero, one in five of its customers are not prepared to meet that seven-day deadline and one in two feel only ‘somewhat prepared’.
“Most business owners didn’t go into business because they wanted to manage employment; they want to use their time to do what they love and what they’re passionate about,” Thompson said.
“Twelve months may seem like a long time, but the impact on SMBs and required infrastructure upgrade imposed should not be underestimated. We’re encouraging all businesses to turn their attention to Payday Super and making sure you have the right systems and processes in place to manage the admin and cashflow impacts.”
Perhaps, more worryingly, Employment Hero data suggests that 15 per cent of SMBs are unaware of Payday Super and one in three said they will need to build cash reserves to stay solvent under the changes.
Thompson said: “Payday Super could be the biggest positive change to super since its introduction, but it must be done in a way that doesn’t break small businesses or cost Australians their jobs.
“Without changes to payment infrastructure and proposed penalties, we risk a system where SMBs are punished for delays outside their control and that’s simply unfair.”
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