Payroll due this week and the money isn't there: what to do now

There are few feelings in business worse than looking at the bank balance on a Tuesday and realising Thursday’s payroll won’t clear. Your team has done the work. They have rent, mortgages and families. And you have a day or two to fix it. The good news is that a payroll gap is usually a timing gap — money is owed to you, just not yet — and timing gaps are exactly what fast funding is built for.

Step 1: what is the real shortfall?

Payroll is more than net pay. Before you call anyone, add up:

• Net wages going to employees’ accounts.
• PAYE and other deductions you’ll owe Inland Revenue. Most employers pay PAYE by the 20th of the following month, so this may not be due this week — but it must be planned for.
• KiwiSaver. Inland Revenue says the minimum employer contribution is 3.5% of an employee’s gross salary or wages unless they’re on a temporary rate reduction.
• Any other deductions — student loan, child support — that pass through you.

Then subtract what’s realistically arriving before payday. The difference is your gap. Be precise; it decides which funding option fits.

Step 2: can I free up cash in 24 hours?

Before borrowing, squeeze what you can from the business itself:

1. Chase overdue invoices today. Call, don’t email. Offer a payment link.
2. Ask a key supplier for a short extension. A week’s delay on one large bill can cover a payroll gap.
3. Pause non-urgent spending. Equipment, marketing, stock that can wait.
4. Check for refunds owed to you. A GST refund pending in myIR, a supplier credit.

Whatever this frees up reduces how much you need to borrow.

Step 3: what funding can land before payday?

Situation	Realistic option
Small gap, steady trading	Cash flow loan, same day possible
Recurring gaps every month	Line of credit for next time
Large invoices outstanding	Invoice finance (set up for the future)
Larger gap, property available	Property-secured, $20k–$250k same day possible

Since May 2023, everyday payments between participating New Zealand banks process every day, so an approved unsecured loan can sometimes land even over a weekend. See weekend and public holiday funding.

If payroll is in the next 48 hours, enquire now and write “payroll Thursday” in the notes.

Step 4: keep compliance on track

Cash pressure doesn’t pause your obligations. Inland Revenue requires electronic filers to submit employment information within 2 working days of each payday. File on time even if PAYE payment will come later — late filing creates separate problems.

What should I tell my staff?

If you’re confident funds will arrive in time, you may not need to say anything. If there’s real risk of late pay, talk to staff early and honestly, and get advice on your obligations. Most teams respond far better to a straight conversation than to a surprise.

How do I stop this happening again?

• Build a payroll buffer — even one week’s wages in a separate account.
• Shorten your cash cycle — invoice faster, follow up sooner.
• Set up a line of credit while things are calm.
• Plan for wage cost changes — our guide to KiwiSaver employer contributions and cash flow explains how to build them into forecasts.

What documents will the lender ask for on payroll day?

Have these ready before you enquire so the decision isn’t waiting on paperwork:

• six months of statements for every business account;
• current photo ID for each director;
• your Companies Register details;
• a payroll summary showing the total due, including deductions;
• a list of outstanding customer invoices, if they’re the reason for the gap.

The payroll summary and debtor list are particularly useful. They show the lender exactly why the gap exists and when it will close — which is the repayment story an unsecured lender needs to hear.

What if this keeps happening?

If payroll gaps have happened more than once in the last year, it’s worth treating the cause as well as the symptom. Common causes include customers on long payment terms, growth that outpaces cash, seasonal income with year-round wages, and tax payments that land in the same week as payroll. Each has a better long-term fix than repeated urgent loans: a line of credit set up in advance, invoice finance for slow-paying business customers, or a working capital facility sized for your cycle. Talk the pattern through on the first call — the specialist may suggest a structure that covers this week and prevents the next scramble.

Illustrative example: a Hamilton manufacturer

Illustrative only. A Hamilton metal fabrication company with 14 staff finds on Tuesday that two customers have paid late, leaving a $31,000 gap for Thursday’s payroll. The owner chases one customer, who pays $9,000 on Wednesday morning, and enquires for $25,000 with statements and ID ready. The unsecured loan is approved and funded on Wednesday afternoon. Payroll runs on time, and the loan is repaid as the remaining invoices clear.

Payroll looming? Let’s move now.

Your team shouldn’t feel your cash-flow timing. Send a short enquiry with your payday in the notes — it takes about a minute and there’s no credit check when you first enquire. We don’t spray your details across a list of lenders; a real person reads them and calls you quickly. Accurate figures on the form help us get funds moving before payday.

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