Can't make payroll this week? What to do first

Few things make a business owner’s stomach drop like looking at the account on Wednesday and realising Friday’s wages won’t clear. The good news: payroll gaps are one of the most common reasons businesses need fast finance, and one of the easiest for lenders to understand. The key is moving early in the week.

What should I do first when payroll is short?

Before you borrow a dollar, get the facts straight. It takes twenty minutes and makes everything that follows faster.

1. Work out the exact shortfall. Net wages, plus the PAYE and KiwiSaver deductions that go with them, minus what’s in the account.
2. Check what’s coming in. Which invoices are genuinely likely to be paid this week and next?
3. Call your biggest debtors. A polite nudge can sometimes close the gap on its own.
4. Decide how long you need the money. Two weeks until a big invoice lands? Three months until the season turns?
5. Apply early in the day. Morning applications on a business day give same-day funding its best chance.

Which funding fits a payroll gap?

Situation	Usually fits	Why
One-off gap, big invoice due soon	Cash flow loan	Simple, short, repaid when the invoice lands
Payroll is tight every few weeks	Line of credit	Draw for each pay run, repay as income arrives
Large workforce, seasonal swings	Line of credit or property-secured facility	Bigger limits, smoother repayments
Wages plus tax arrears building	IRD tax debt funding alongside	Clears both before penalties grow

Already know the number? Apply for wage funding now and put the pay date in the purpose field.

How fast can wages be funded?

Payroll gaps usually fit unsecured products, which skip property checks entirely. With six months of business bank statements and ID for the directors ready, our aim is funding within 24 hours of your first application — and smaller unsecured amounts can be funded the same day.

What makes a payroll deal quick:

• Accurate amount — include deductions, not just net pay.
• Every business account’s statements — lenders want the whole picture.
• A clear repayment source — “our largest client pays $60,000 on the 20th” is ideal.

Don’t forget PAYE and KiwiSaver

Wages aren’t the only cost on payday. Every pay run creates PAYE and KiwiSaver deductions that must be paid to Inland Revenue. For most employers — those with annual PAYE and ESCT under $500,000 — deductions are due by the 20th of the following month. Larger employers pay twice a month.

The employer KiwiSaver cost has also risen. Inland Revenue says the default contribution rate for employees and employers moved to 3.5% from 1 April 2026, with a further step to 4% scheduled from 1 April 2028. If your wage bill budget predates April 2026, it may be understating the true cost of each pay run.

Paying wages but skipping the deductions just moves the problem to IRD — and PAYE debt is treated very seriously. Fund both.

Why do payroll gaps happen to healthy businesses?

• Growth. More staff before more invoices are paid.
• Seasonality. Summer hospitality, harvest crews, Christmas retail.
• Slow payers. One major customer on 60-day terms can throw the whole month.
• Three-pay months. Fortnightly payrolls produce occasional months with three pay runs.
• Holiday pay. Large annual leave payouts around Christmas and Easter.

An illustrative example: a Queenstown restaurant group pays 38 staff fortnightly. Early in the ski season, wages jump before tourist numbers peak, and the account will be about $42,000 short for one pay run. A short cash flow loan, repaid from July takings, covers it. The following year, the owner sets up a line of credit in April so the gap is covered before it opens. (Illustrative only.)

How do I stop payroll gaps recurring?

• Forecast pay runs 13 weeks ahead. business.govt.nz has a free cash flow forecaster.
• Mark three-pay months and holiday pay peaks on the calendar.
• Set aside PAYE and KiwiSaver in a separate account each pay run.
• Tighten payment terms on large customers, or take deposits on big jobs.
• Open a line of credit early, while trading is good, so it’s ready when you need it.

What will a lender want for a payroll loan?

• Six months of business bank statements showing the wage pattern.
• The amount needed and the pay date.
• Photo ID for the directors.
• The repayment source — an invoice due, seasonal takings or a contract payment.
• Any PAYE or KiwiSaver arrears, disclosed upfront.

With these ready, the deal can move as fast as the pay date demands.

Can I set up wage funding before I need it?

Yes — and it’s the best way to take the stress out of payroll. A line of credit set up in a good month costs little or nothing while it’s unused, depending on the facility, and is ready to draw the morning a pay run looks short. The approval is the slow part; once it’s in place, drawing funds for wages can take minutes.

Make sure your team gets paid on time

A short-term funding solution that keeps wages flowing protects your staff, your reputation and your relationship with IRD. See what you qualify for in about 60 seconds — ideally first thing in the morning. Applying won’t trigger a credit check, your enquiry stays with one specialist instead of doing the rounds, and a real person will ring to confirm the amount and timing. The more precise you are about the shortfall and pay date, the faster we can get the money moving.