Funding a hire: covering the months before a new person pays for themselves

Every owner reaches the point where the workload outruns the people. Orders wait, customers ring twice, and evenings vanish. The answer is another pair of hands, but hands come with a payroll, and payroll starts on the first day while the extra revenue starts later. This page is about the space in between.

What does a hire really cost in the first year?

Wages are the headline, but they are only the start. A fuller list:

• Wages or salary at the correct award or agreement rate.
• Superannuation. Business.gov.au gives the standard rate as 12 per cent of qualifying earnings, with some awards or agreements requiring more.
• PAYG withholding, which you collect and report, even though it is not your money.
• Leave entitlements, accruing from the start.
• Payroll tax if your total wages pass your state’s threshold. Thresholds differ between states and territories.
• Tools and set-up: a laptop, a uniform, a tool kit, software seats.
• Training and supervision, which is time you could have spent selling.
• Recruitment costs, if you use an agency or advertise.

An accountant can build the number properly for your award and state. For planning, add a cushion for everything you forgot.

What is the payback gap?

The payback gap is the stretch between hiring and the point where the new person’s contribution exceeds their cost. In some trades it is short, since a second installer can start billing quickly. In others it is long, such as a salesperson building a pipeline or a chef learning a new menu.

An illustration, with no real business behind it: a cabinetmaker hires an apprentice-turned-tradesperson at a total cost of about $7,500 a month. For the first two months, output is slow and revenue barely changes. By month three, extra jobs begin to flow. Month four is the first month the hire clearly pays for themselves. The gap the owner has to fund is roughly four months of cost, less any extra revenue earned along the way, so about $20,000 to $25,000.

That figure, not the annual salary, is what the funding has to cover. The Dough gap calculator lets you test a version of it.

Which funding fits a hire?

For trading businesses, unsecured funding is typically $5,000 to $500,000, sized on turnover and bank statements. Three shapes tend to come up:

1. A working-capital loan sized to the payback gap (details).
2. A line of credit if your cash will swing during the ramp-up (details).
3. Property-backed funding for a bigger hiring push, such as a whole new team, where an unsecured limit will not stretch.

Lenders will want to see why the hire will lift revenue. A line like “We turn away about six jobs a month because we cannot get to them” is more persuasive than “We want to grow”.

What does payday super change?

According to the ATO, Payday Super applies from 1 July 2026, and under it super guarantee is paid with each wage payment rather than quarterly. For a new hire, this means the super cost leaves your account on every pay run from the start. There is no quarter-end cushion. Build that into your cash plan, and see our page on payroll funding for the wider picture.

How can I shorten the payback gap?

Business.gov.au suggests several things that work in practice:

• Check the total cost of employment before committing.
• Use flexible rostering, or part-time and casual hours, to match cost to demand.
• Consider commissions paid only after customers pay.
• Invest in training so staff stay and become productive sooner.

Also have the hire do revenue-earning work as early as possible. A new person who can bill on week two shortens the gap more than any clever financing.

What if the hire doesn’t work out?

Plan for it. Ask whether the business could carry the cost for six months with no extra revenue at all. If not, the hire is too big a bet for now, or the funding needs a longer buffer. Honest stress-testing is not pessimism, it is how businesses survive the occasional bad hire.

Should I hire, contract or outsource?

Not every gap needs a permanent person. Business.gov.au lists flexible rostering and outsourcing among the options for managing staffing costs. A casual or part-time hire matches cost to demand. A contractor brings skills for a defined job without the long-term commitment. An outsourced function, such as bookkeeping or marketing, can be cheaper than an employee for the volume you have.

On the other hand, a permanent hire builds capability, loyalty and culture, and some work simply cannot be done well by a rotating cast. The honest question is what the work looks like in twelve months. If demand is steady and growing, a permanent hire usually wins. If it is lumpy, flexibility is worth paying for. Whichever you choose, the funding conversation is easier when the choice is deliberate.

Ready to plan the funding?

If you have worked out the gap and want to see what is possible, make an enquiry. Tell us the role, the monthly cost, the expected payback and the amount you have in mind. A real person reads it and calls you. There is no credit check just to ask, and your details are not sent out to a crowd of lenders.

Exact figures help: the real monthly cost, the real timing, and the real purpose get you to the right option on the first call. Check my options when you are set.