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Australian small and medium-sized enterprises (SMEs) may largely be aware of upcoming Payday Super changes, but most have not yet taken action to prepare for the new costs.
From 1 July 2026, employers will be required to pay superannuation contributions at the same time as wages, replacing the longstanding quarterly payment cycle.
The shift to Payday Super will remove what some businesses have treated as a built-in working capital buffer, requiring businesses to fund superannuation obligations in real time rather than deferring payments across a quarter.
But, according to new research from the ScotPac SME Growth Index, while 88 per cent of SMEs have some level of understanding, most businesses are yet to take action to prepare for the financial impact.
According to ScotPac, 68 per cent of SMEs have made no cash flow preparations for the transition. Just 5 per cent have secured new funding ahead of the changes.
The research shows that smaller businesses are most exposed, with 78 per cent of micro-SMEs (fewer than 10 employees) yet to prepare, compared with 58 per cent of larger SMEs.
Of those that have taken action, the most common approach has been seeking advice from accountants (17 per cent), followed by engaging brokers for cash flow support (7 per cent).
One in five SMEs (21 per cent) told ScotPac that they are considering reducing headcount to manage the expected increase in cash flow pressure.
ScotPac CEO Jon Sutton said the findings highlight a material and underappreciated risk to SME liquidity, particularly in “a perfect storm” of rising input costs and supply chain uncertainty due to global tensions.
“On the surface, it’s encouraging that most SMEs are aware of the changes,” the CEO said.
“But when a majority have failed to make any financial preparations, it’s clear there is a risk that many businesses are underestimating the cash flow impact.
“In the current climate of economic uncertainty driven by the flow-on effects of the Middle East conflict, business owners need to focus on what they can control – starting with a cash flow plan to smooth the introduction of payday super.”
Sutton said the findings underscore the importance of proactive planning and early engagement with financial and advisory partners.
“This is not just an administrative change, it’s a structural shift in how businesses manage their cash flow,” he said, suggesting that the removal of the flexibility in paying super on a quarterly basis means any businesses already operating with tight margins could create real pressure if they’re not prepared.
“SMEs need to model the impact now, understand the additional working capital required, and put the right funding structures in place.”
He added that the reforms present a clear opportunity for brokers and advisers to support their clients through the transition.
“With most SMEs yet to prepare, brokers have a critical role to play in helping clients assess the impact and implement solutions before the changes take effect,” he said.
“Access to flexible working capital will be key – not just to meet super obligations, but to ensure businesses can continue to fund day-to-day operations without disruption.”
[Related: Payday Super reforms could damage SME borrowing power]
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