Australian SMEs are heading toward a major shift in payroll obligations, with new research from the ScotPac SME Growth Index revealing a significant gap between awareness and preparedness ahead of the Federal Government’s ‘Payday Super’ reforms.

From 1 July 2026, employers will be required to pay superannuation contributions at the same time as wages, replacing the longstanding quarterly payment cycle.

While awareness of the changes is high – 88% of SMEs report some level of understanding – most businesses are yet to take action, with 68% admitting they have made no cash flow preparations for the transition.

ScotPac CEO Jon Sutton said the findings highlight a material and underappreciated risk to SME liquidity, particularly in a perfect storm environment 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,” Mr Sutton said. “But when nearly seven in ten haven’t made 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 impacts 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.”

The shift to payday super will remove what has effectively been a built-in working capital buffer for many SMEs, requiring businesses to fund superannuation obligations in real time rather than deferring payments across a quarter.

“That quarterly cycle has historically given SMEs some flexibility in managing cash flow,” Mr Sutton said.

“From July, that flexibility disappears. For businesses already operating with tight margins, that could create real pressure if they’re not prepared.”

The research shows that smaller businesses are most exposed, with 78% of micro-SMEs (fewer than 10 employees) yet to prepare, compared with 58% of larger SMEs.

Among those that have taken steps to prepare, the most common approach has been seeking advice from accountants (17%), followed by engaging brokers for cash flow support (7%). Just 5% have secured new funding ahead of the changes.

Alarmingly, one in five SMEs (21%) say they are considering reducing headcount to manage the expected increase in cash flow pressure.

Mr 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.

“SMEs need to model the impact now, understand the additional working capital required, and put the right funding structures in place.

“ScotPac’s expertise and focus is on helping businesses stay in control of their cash flow.

“With the right funding arrangements in place, SMEs can manage the transition to payday super with confidence – covering wages, super, and all other operating costs while continuing to grow.”

Mr Sutton said 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.”

Mr Sutton noted that the closure of the Australian Taxation Office’s Small Business Superannuation Clearing House on 1 July 2026 would add another layer of adjustment for small businesses.

“For many SMEs, particularly smaller operators, the Clearing House has been a simple, low-cost way to manage super payments,” Mr Sutton said.

“Its closure means businesses will need to transition to alternative systems, which may come with additional cost and complexity.”

About the SME Growth Index

• Commencing in March 2014, ScotPac’s bi-annual SME Growth Index is Australia’s longest-running research report on SME revenue growth sentiment.

• The Round 24  research was conducted by East & Partners who interviewed 728 SME enterprises with annual revenues of A$1-20 million.

• SMEs surveyed have operated continuously for an average of 16.3 years and manage, on average, 51 full-time equivalent employees.

• Sectors represented in the survey included Property & Business Services (14%), Wholesale (13%), Manufacturing (12%), Retail (10%), Transport & Storage (10%), Personal & Other Services (10%), Construction (10%) and other industries including Mining & Resources, Agriculture / Forestry / Fishing, Media & Telco, Accommodation, Cafes & Restaurants, Finance & Insurance (non-bank) and Electricity, Gas & Water.

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ScotPac is Australia and New Zealand’s largest non-bank SME business lender, providing funding to small, medium and large businesses from start-ups to enterprises exceeding $1 billion in revenues. For over 35 years, ScotPac has helped thousands of business owners succeed, offering fast and flexible funding. From simple to complex, small to large, start-up, growth or turnaround – ScotPac can help with a range of funding including Invoice Finance, Trade Finance, Asset Finance, Line of Credit, Business Loans and Asset Based Finance. ScotPac was recently awarded The Adviser Magazine’s Debtor Finance Loan of the Year for a sixth time.

For more information contact: Todd Hayward, 0412 205 151