Payroll due and the account's short? Fast options to cover wages

Why is payroll different from other bills?

A supplier might wait a week. A landlord might give you a fortnight. Your staff are relying on their pay to cover their own rent, groceries and mortgages, and wages carry legal obligations that other bills don’t. Late pay erodes trust faster than almost anything else a business can do.

That’s why payroll is the one shortfall where we’d almost always recommend arranging funding rather than improvising. And it’s why the best payroll funding is set up before you need it.

What are the fast options for payroll?

Option	Speed	Fits	Watch out for
Existing line of credit or overdraft	Instant to near-instant	Any gap, if the limit is big enough	Limit too small; drift
Small unsecured loan	Same day possible for smaller amounts	One-off gap with a clear payback	Weekly or daily repayments
Invoice finance (if set up)	Fast on new invoices	Gap caused by slow-paying business customers	Setup time if not already in place
Property-secured loan	$20k–$250k possible same day	Large payroll gap or credit issues	Property at risk
Merchant cash advance	Quick	Card-heavy hospitality and retail	Daily deductions

Is your payroll gap one-off or recurring?

This decides almost everything.

One-off gaps happen when something unusual hits: a big customer paid late this month, an unexpected repair, a slow week. A small short-term loan, repaid when the money arrives, solves it cleanly.

Recurring gaps happen because of how the business is built: you pay staff weekly or fortnightly but invoice monthly; your customers pay on 30 or 60 days; your seasons are uneven. A one-off loan just moves the gap a month down the road. A revolving facility — a line of credit or invoice finance — is the structural fix.

If you’re not sure, look at your bank statements for the last six pay cycles. If the account dipped below comfortable before most of them, it’s recurring.

Don’t forget the costs on top of net wages

Payroll isn’t just what lands in staff bank accounts:

• PAYE. Inland Revenue requires small employers to pay deductions by the 20th of the following month; large employers pay twice monthly. A big wage month creates a big PAYE bill a few weeks later.
• KiwiSaver. Inland Revenue says the default contribution rate rose from 3% to 3.5% for both employee and employer on 1 April 2026, rising again to 4% on 1 April 2028. For staff on the default rate, employer contributions are now higher.
• Holiday pay and leave. Peaks around Christmas and school holidays.
• ACC levies, at their own times of year.

When you calculate how much to borrow, include these. Borrowing only enough for net wages can leave you short on the 20th. Our guide to the 2026 KiwiSaver employer contribution change works through the cash flow effect in more detail.

What does it look like in practice?

Illustrative example. A Napier fruit-packing contractor pays a seasonal crew weekly but invoices growers monthly. In peak season the gap between paying wages and getting paid stretches to six weeks. A one-off loan in the first season worked, but the same gap reappeared the next year. In the second season the contractor sets up invoice finance against grower invoices, so wage funding grows automatically as the crew grows.

Illustrative example. A Wellington architecture practice has a single client pay three weeks late. Wages are due Thursday. A small unsecured loan, possibly funded the same day, covers the gap and is repaid in full when the client pays. One-off problem, one-off fix.

Wages due this week? Tell us the amount and the date — it takes about a minute.

What should you avoid?

• Paying staff late without advice. Talk to an employment adviser if you genuinely can’t make payroll.
• Using PAYE money to pay wages. Deducted PAYE belongs to Inland Revenue. Using it to fund net wages creates a bigger problem on the 20th.
• Stacking short loans every pay cycle. If you’re borrowing for every payroll, the business needs a structural fix. See our loan stacking guide.
• Borrowing to pay wages in a business that’s losing money. Funding buys time; it doesn’t fix margins.

How do you make payroll gaps smaller?

• Invoice faster and on shorter terms where you can.
• Chase overdue accounts early. Our page on late-paying customers has practical tactics.
• Align pay cycles with income where it’s fair and lawful to do so.
• Forecast. business.govt.nz recommends cash flow forecasting as a way to avoid financial trouble — a simple twelve-week forecast shows every payroll and PAYE date coming.
• Set up a standby facility in a quiet month, not on payroll morning.

For a direct comparison of the two most common payroll structures, read line of credit vs short-term loan.

What should you have ready?

Recent bank statements, ID, your NZBN or company number, your payroll totals including PAYE and KiwiSaver, and the dates customer money is due. With those, a decision can be quick.

Get payroll covered without the scramble

Whether it’s this week’s wages or a gap that keeps coming back, we’ll suggest the option that actually fits. Asking doesn’t involve a credit check, and your details stay with one real person rather than being sent to a list of lenders. Tell us accurately how much payroll costs per cycle, how often the gap happens and when customer money is due — and we’ll get you an answer while there’s still time to act. See if you qualify.