How to fund hiring new staff

Hiring is one of the most exciting moments in a business — and one of the most nerve-racking. A new person can unlock growth you couldn’t reach alone. But their wages start on day one, while the revenue they create might take weeks or months to arrive. That gap is where a lot of owners hesitate. With honest numbers and the right finance, it doesn’t have to be a leap of faith.

What does a new employee really cost?

The salary is only the start. Your total cost usually includes:

Cost	Notes
Wages	At least the relevant award or agreement rate — Fair Work has guidance on paying wages
Superannuation	The ATO lists the super guarantee at 12% from 1 July 2025 onwards
PAYG withholding	Withheld from wages and paid to the ATO on your BAS cycle
Leave entitlements	Annual and personal leave accrue from day one for permanent staff
Workers compensation insurance	Required in each state and territory
Payroll tax	Only above your state’s threshold — check your state revenue office
Equipment and tools	Laptop, phone, uniform, vehicle, licences
Recruitment and onboarding	Ads, recruiter fees, training time
Management time	Yours, while they learn the ropes

business.gov.au’s guide to hiring employees walks through these obligations step by step, including Single Touch Payroll and record keeping.

How does Payday Super change the cash picture?

From 1 July 2026, Payday Super means employers pay super at the same time as wages rather than quarterly. According to the ATO, a contribution is on time if it reaches the employee’s super fund, with the information needed to allocate it, within 7 business days after you pay the employee.

For cash flow, that means super leaves your account every pay cycle instead of in a quarterly lump. Many businesses used to enjoy a few weeks’ float between paying wages and paying super; that float is gone. Factor it into the cost of every new hire and into your cash-flow gap.

How do you work out the ramp-up gap?

1. Total the monthly cost of the new person (everything in the table above).
2. Estimate the extra monthly revenue they’ll generate once fully productive.
3. Estimate how long it takes to reach that point — be conservative.
4. Add up the shortfall for each month until revenue covers cost.

That total is your ramp-up gap. It’s what you might fund. Our guide to costing your growth plan has a worked template.

Which finance suits hiring?

Situation	Finance that fits
A defined ramp-up of a few months	Working capital loan
Ongoing ups and downs as you add people	Business line of credit
Hiring to service a new contract with slow-paying clients	Invoice finance
A new hire who needs a vehicle or tools	Vehicle or equipment finance for the gear
A bigger team expansion	Property-backed loan for larger amounts

The rule of thumb: fund the gap, not the role forever. If the new person can’t cover their cost within a reasonable time, the issue is the business case, not the finance. If you’d like a second opinion on yours, run it past a real person.

What does it look like in practice? (illustrative)

A Canberra IT support business turns away new clients every month. Hiring another technician would let it take them on, but the new clients will be onboarded gradually over about three months. The owner costs the role at its full monthly cost, including super paid each payday, and estimates the new clients will cover that cost by month four. A working capital loan covers the first three months’ shortfall, repaid over the following year from the new recurring fees. Illustrative only.

What should you check before hiring on borrowed money?

• Is the demand real? A waiting list, signed contracts or turned-away work beat a hunch.
• Is the role clear? Know exactly what the person will do and how it creates revenue or saves your time.
• Can you afford a slow start? Build in a buffer for a longer ramp-up than planned.
• Is your payroll set up? Single Touch Payroll, super on payday and correct award pay from day one.
• Have you considered casuals or contractors? They can test demand before you commit to a permanent role — but follow the rules on employee versus contractor carefully.

How do lenders see a hiring-funded loan?

Lenders want to understand how the hire will produce revenue. Bring evidence: a backlog of work, new contracts, enquiries you’ve turned down, or a pipeline. Recent bank statements show whether the existing business can carry the repayments if the ramp-up is slower than planned. Clear numbers make it far easier to say yes.

Employee or contractor?

Some owners consider contractors to avoid the fixed cost of an employee. That can make sense for genuinely independent work, but getting the classification wrong can lead to backdated super, tax and entitlements. business.gov.au’s hiring guide explains the difference. When in doubt, get advice before you engage someone.

What documents will you need?

• Photo ID and ABN or ACN
• Recent business bank statements and BAS
• Your costing of the role and the ramp-up gap
• Evidence of demand: contracts, backlog, pipeline
• Financial statements for larger amounts

Ready to grow the team?

The right hire can change the trajectory of a business. We’ll help you size the ramp-up gap and fund it in a way that doesn’t keep you up at night.

There’s no credit check when you enquire, your details aren’t passed to a crowd of lenders, and a real lending specialist calls you. Please be accurate about turnover, the cost of the role and the revenue you expect, so we can match the right option first time. See if you qualify.