Quick answer
When a slow month leaves too little in the account for wages, PAYE and KiwiSaver deductions, short-term business funding can cover payroll so staff are paid on time and Inland Revenue obligations stay current. Lenders size this on your bank statements; unsecured amounts typically run from $5,000 to $500,000 and smaller amounts can sometimes be funded the same day.
Key points
- Wages, PAYE and KiwiSaver deductions are commitments you can't put off without consequences.
- The minimum employer KiwiSaver contribution rises from 3% to 3.5% from 1 April 2026, then 4% from 1 April 2028.
- Short-term funding works best when there is a clear trading recovery to repay it.
- Recurring payroll gaps are usually better handled with a line of credit.
- Use
- Wages, PAYE, KiwiSaver
- Unsecured
- Typically $5k – $500k
- Speed
- Same day possible (smaller amounts)
- Credit check to enquire
- None
Payroll is the one bill most business owners will do almost anything to meet. Your team has rent and groceries to pay, and a missed or late pay run damages trust fast. Yet payroll is also where cash gaps show up first, because wages are paid on a fixed rhythm while income arrives whenever customers decide to pay.
Why do payroll gaps happen in healthy businesses?
Most payroll shortfalls come from timing, not trouble:
- A big customer pays late, and the invoice that funds this fortnight’s wages is still outstanding. See slow-paying debtors.
- A seasonal dip — the winter months for a beach cafe, the quiet weeks after Christmas for a trades business.
- Growth. New staff start work weeks before the extra revenue they generate lands.
- Holiday pay and final pays when a long-serving staff member leaves.
- Tax dates colliding with a pay run, especially around January and May.
What does a pay run really cost?
The wage figure is only part of it. An employer in New Zealand also needs to account for:
| Item | What it is |
|---|---|
| Gross wages | The headline pay amount |
| PAYE | Tax deducted from wages and paid to Inland Revenue |
| Employer KiwiSaver | Compulsory contribution for members — 3%, moving to 3.5% from 1 April 2026 |
| Employee KiwiSaver | Deducted from pay and passed on with PAYE |
| ACC and other deductions | Levies and any student loan or child support deductions |
| Holiday pay | Accrued leave and public holiday entitlements |
Under payday filing, employment information goes to Inland Revenue each payday, and deductions are paid on the due dates. Those dates do not move just because a customer is slow. Our guide to the KiwiSaver employer contribution increase shows how to plan for the higher rate.
What funding options cover payroll?
Unsecured short-term loan. Best for a one-off gap with a clear recovery — for example, a large invoice due in four weeks. Sized on your bank statements, with same-day funding possible for smaller amounts.
Business line of credit. Ideal when payroll gaps recur. You draw for the pay run, repay when money lands and pay only for what you use.
Property-secured funding. Useful when the gap is large, ongoing for a few months, or combined with tax arrears. Amounts run from $20,000 to $5,000,000.
Invoice finance. If unpaid invoices are the cause, borrowing against them can unlock the money already owed to you.
What will a lender want to see?
- Three to six months of business bank statements
- Your payroll amount and frequency
- Any arrangement in place with Inland Revenue
- Some evidence of the recovery — a contract, an invoice due, a seasonal pattern in prior years
You do not need perfect books to start a conversation. You can see if you qualify in about 60 seconds and talk through the details with a real person.
When is borrowing for payroll a bad idea?
If wages exceed what the business earns month after month, borrowing will only postpone the problem. In that case it is worth speaking with your accountant about pricing, staffing levels or restructuring. A good lender will tell you honestly when funding isn’t the answer — and that is how we approach every enquiry.
An illustrative example: the café that grew too fast
Consider an illustrative suburban café that adds a second site. For the first two months, the new location is staffed and stocked but not yet busy, while the original café carries both payrolls. The owner knows the numbers will even out by month three, but the fortnightly pay run doesn’t wait for that.
In this kind of case, a short-term unsecured advance sized at around two pay runs, repaid over the following four to six months, often makes more sense than a long loan. If the owner expects the same pressure every winter, a line of credit set up while the account looks healthy would be the better long-term fix. Either way, the decision rests on a clear view of the next few months — which is why we always ask when you expect trading to recover.
Questions to ask yourself before funding a pay run
- Is this a one-off or a pattern? One-offs suit a loan; patterns suit a revolving limit.
- What is the repayment source? Name the invoice, season or contract that will repay it.
- Can the repayments fit your quietest week? Daily or weekly debits need to work at your low point.
- Are your Inland Revenue filings up to date? Lenders look more favourably on a business that files on time, even if a balance is owing.
- Have you talked to your accountant? A quick conversation about timing PAYE, holiday pay and KiwiSaver can save cost.
Keep your team paid on time
If a pay run is coming and the account looks light, act a few days early rather than the night before. Tell us the payroll amount and when it is due. You won’t face a credit check when you first enquire, your details stay with us rather than going out to multiple lenders, and someone will phone you to go through the quickest workable option.
The more accurate your answers on the form, the faster we can line up the right solution. Ask about payroll funding now.
Frequently asked questions
Can I get a loan to pay staff wages?
Yes. Paying wages is a core business purpose, and short-term lenders fund it regularly. They will check that your account can carry the repayments once trading picks up.
What are the employer KiwiSaver changes?
The minimum compulsory employer contribution rate is moving from 3% to 3.5% from 1 April 2026, and to 4% from 1 April 2028, according to Inland Revenue's published KiwiSaver changes. It adds a modest but permanent cost to every payroll.
What happens if PAYE is paid late?
Inland Revenue can charge penalties and interest on late employer deductions, and unpaid deductions are treated seriously because they include money withheld from employees. Paying on time, even with short-term funding, protects the business.
Is a line of credit better than a loan for payroll?
If the gap appears every few weeks — for example in a seasonal business — a line of credit is often better, because you draw only what you need for each pay run. For a one-off gap, a short-term loan is usually simpler.
Do I need property to borrow for payroll?
No. Many payroll gaps are funded unsecured based on bank statements. Property security can help with larger amounts or when trading history is short.