A business with $1.8 million in annual wages was, until 1 July 2026, holding up to $54,000 of its employees’ superannuation at any given time as free working capital. That float was never yours, but it sat in your account, smoothed your cash cycle and cost you nothing, and Payday Super has now switched it off. This guide puts a number on what the change means for your business: the float you have lost, the annual cost of replacing it with real funding, and the one-off transition squeeze in the changeover months. Apply your annual wages bill to the method below, or read the worked example to see the mechanics.
Published: July 2026
The method uses three inputs, annual wages subject to super, your pay cycle, and the interest rate on your marginal funding source, and produces four numbers.
Run the cash side of the business through a cash flow forecast calculator and size the super obligation with the estimate your super contributions tool. For policy context, see our Payday Super guide and what the super guarantee costs employers. Official timing rules sit on the ATO Payday Super pages.
The worked method below uses a representative mid-sized business as the default case: $1.8 million in annual wages, fortnightly pay, funding at 11 per cent.
Annual super: $216,000. Old-regime peak float: $54,000, hit four times a year in the days before each quarterly deadline. Old-regime average float: about $43,000. New-regime float: effectively nil, with roughly $8,300 leaving the account every fortnight alongside wages instead of $54,000 leaving quarterly.
Annual cost of the lost float at 11 per cent: about $4,700. And one number the transition year adds on top: a business that habitually paid each quarter near its deadline faces a compressed changeover period where the final June 2026 quarter and the first weeks of payday contributions fall close together, temporarily lifting super outflows well above a normal month before the new rhythm settles. Put that transition-month figure straight into the cashflow forecast rather than letting it arrive as a surprise.
Change any input and the outputs scale with it. A $6 million wages business loses about $145,000 of average float, worth roughly $16,000 a year at overdraft rates. A $600,000 wages business loses about $14,000 of float, worth around $1,600 a year. The percentages are identical; only the noughts move.
A trades firm with $3.6 million of wages: annual super $432,000, peak old float $108,000, average old float about $86,000, annual replacement cost at 11 per cent about $9,500. That is a permanent line item, not a transition fee. Owners who treated super as “next quarter’s problem” were running an invisible facility of nearly six figures.
None of this was a loophole. The quarterly system was designed in an era of cheques and manual remittances, and the 28-day post-quarter deadline was administrative slack, not a policy gift. But its economic effect was real: the system let every employer in the country run an interest-free rolling loan from their own workforce, and businesses built their working capital habits on top of it, mostly without ever naming it.
Payday Super names it and removes it. The policy logic is sound from the employee’s side, contributions compound in their fund from payday instead of sitting in an employer’s account, and unpaid super is visible within days instead of quarters. From the employer’s side, it is a permanent working capital withdrawal of roughly 2.4 per cent of annual wages on average holdings, and it deserves to be planned like one rather than discovered one tight month at a time. National scale context sits in Australia sends $156 billion into super every year.
Once you have your figure from the method above, four moves cover most businesses.
Working through those four moves, rebuilding the forecast, setting the provisioning rhythm, sizing the facility, and finding the working capital offsets, is a fortnight of structured finance work, and it is precisely the kind of project an embedded finance services team runs as a matter of course. Where strategic packaging is needed, fractional CFO costs in Australia frames the oversight layer.
Provision first if margins support it. Moving 12 per cent of wages and GST into a reserve as you earn is operational hygiene, not clever finance.
Borrow second if the cycle cannot give the cash back quickly enough. Price the facility against the annual float cost, not against zero.
Free cash from the cycle whenever debtor days or inventory can move without damaging revenue. A five-day improvement in collections on a $200,000 monthly revenue book is roughly $33,000 of permanent working capital, often more than the lost super float.
For transparency, and so the numbers can be checked or cited: peak float is one quarter of annual superannuation guarantee contributions at the current 12 per cent rate. Average float assumes contributions accrue evenly through each quarter and are paid at the 28-day post-quarter deadline, giving a mean holding of approximately 73 days of contributions, which is annual super multiplied by 0.20. The new-regime float is treated as nil, reflecting same-day payment as the operationally safe standard under the 7 business day fund-receipt rule. Annual cost multiplies the average float lost by your nominated funding rate. Figures are pre-tax and exclude any earnings the business previously made on held balances. The superannuation guarantee rate and the timing rules are set by legislation; refresh the inputs when they change.
Example: wages $1,800,000 → annual super $216,000 → peak $54,000 → average $43,200 → at 11% ≈ $4,752 a year.
What is superannuation float?
The balance of accrued but not-yet-paid super an employer holds between paydays and the payment deadline. Under the old quarterly rules that balance peaked at a full quarter’s contributions; under Payday Super’s 7 business day rule it falls to effectively nothing.
How much float did the average business lose under Payday Super?
On average holdings, roughly 20 per cent of a year’s super contributions, which is about 2.4 per cent of annual wages, with the peak at a full quarter’s super. A $1.8 million wages business loses around $43,000 of average float and $54,000 at peak.
Is losing the float an actual cost?
It is the removal of free funding, which becomes a real cost the moment the same working capital must come from an overdraft, a facility or forgone growth. At typical business funding rates the annual cost runs around 10 to 15 per cent of the average float lost, recurring every year.
Does paying super fortnightly instead of weekly preserve any float?
Marginally: contributions sit with you for at most a few days between payday and fund receipt regardless of cycle. The days-level differences are not worth optimising against the compliance risk of running the window to its edge. Plan on zero float.
Why does July 2026 hit harder than the months after it?
The final June 2026 quarter under the old rules and the first payday contributions under the new rules fall in the same period, so businesses that paid quarterly near the deadline experience a one-off stack of both regimes before settling into the flat per-payday rhythm.
What is the best way to absorb the change without borrowing?
Provision as you go: move super, GST and PAYG withholding into a reserve account as each pay run and week of trading occurs, so obligations are always pre-funded. Then recover the lost float from the working capital cycle itself, faster collections, better stock turns, renegotiated terms, before pricing a facility.
Does this method account for the super guarantee rate changing?
It uses the legislated 12 per cent rate current at the time of writing. Refresh the inputs when the rate or the timing rules change. The methodology is published above so any figure can be reproduced or adjusted.
Is this guide financial advice?
No. It is general information that models the cashflow mechanics of a legislative change using your inputs. Decisions about funding, structuring or tax should be made with your own adviser using your full circumstances.
Should I delay super to protect cashflow?
No. Delay creates shortfall charge, notional earnings, possible Fair Work exposure and a damaged compliance record. If cash is tight, fix pricing, collections or costs; do not borrow from employee super without asking.
How do I put the float loss into a board pack?
Show peak old float, average old float, annual funding cost at your facility rate, and the July transition stack as a one-off. Then show the permanent per-payday outflow line in the 13-week forecast.
Scale Suite is a Sydney-based provider of outsourced finance teams and fractional CFO services for Australian SMEs. We deliver weekly bookkeeping, payroll, BAS/IAS lodgement, cashflow reporting, management accounts, and strategic fractional CFO oversight, all as a fully embedded team that works inside your business.
CA-qualified, Xero Certified, and registered BAS Agents, we replace fragmented bookkeepers and once-a-year accountants with one responsive finance function at a fraction of the cost of full-time hires. We serve growing businesses across Sydney, Melbourne, Brisbane, and Perth, with packages starting from $1,500 per month and no lock-in contracts.
Visit Scale Suite | View Our Finance Services | View Our HR Services | Get Your Free Proposal
We review and check this guide periodically. At the time of writing (July 2026), all information was current. Scale Suite is a registered BAS Agent, not a licensed tax advisor or financial advisor. This content is general information only and does not constitute professional tax, financial, or legal advice. Some details may change over time.
Scale Suite is a Sydney-based provider of outsourced finance and HR services for Australian SMEs. We deliver bookkeeping, financial reporting, payroll processing, fractional CFO support, recruitment, employee onboarding, people and culture support, and fractional HR oversight, all as a fully embedded team that works inside your business.
Employment Hero Gold Partner, CA-qualified, and Xero Certified, we replace fragmented finance and HR processes with one responsive, senior-level function at a fraction of the cost of full-time hires. We serve growing businesses across Sydney, Melbourne, Brisbane, and Perth, with packages starting from $1,500 per month and no lock-in contracts.
30 minutes with our team.
We'll review your current finance setup, compare the full cost of an internal hire against our embedded team, and show you exactly what your finance function should cost at your stage of growth.
You'll leave with a clear view of what's working, what's missing, and where you'd save.
No lock-in contracts. 30-day money-back guarantee.
Prefer to book directly? Grab a time here.
