Funding your first hire: bridging the months before a new employee pays off

There’s a moment in most young businesses where the founder becomes the bottleneck. Orders wait to be packed because you’re answering emails. Content doesn’t get made because you’re chasing invoices. The obvious fix is a first hire. The less obvious part is that a new person costs money from their first day and usually takes a while to pay for themselves.

What does a first employee really cost in Australia?

The wage is the headline, but it isn’t the whole bill. According to business.gov.au, employers need to budget for:

• Super guarantee at 12% of the employee’s qualifying earnings.
• Workers compensation insurance, which is compulsory and arranged through your state or territory scheme.
• Leave entitlements for permanent staff: annual leave and personal leave accrue as they work.
• Payroll set-up: Single Touch Payroll reporting software, PAYG withholding registration and record-keeping.
• Onboarding time: recruitment, induction and the weeks when you’re training rather than doing.

State payroll tax usually only applies once total wages pass the relevant state threshold, so it rarely bites on a first hire, but check your state revenue office as the team grows. Our guide to the true cost of your first employee breaks the numbers down with an illustrative example.

How does Payday Super change the cash flow?

This is the big change for 2026. From 1 July 2026, Payday Super requires employers to pay super at the same time as wages. According to the Fair Work Ombudsman, contributions must reach the employee’s fund within 7 business days of payday, with 20 business days allowed for a new employee’s first contribution.

For a young business, that matters. Under the old quarterly system, super built up quietly and was paid in one lump a few weeks after quarter end. Some founders, knowingly or not, used that timing as a short-term buffer. Under Payday Super the money leaves with every pay run. Your cash-flow forecast should show wages and super going out together.

When does a hire actually pay off?

Every hire has a payback period, just like an ad campaign. The trick is being honest about it.

Type of hire	How they pay off	Typical ramp-up
Packing and fulfilment	More orders shipped, fewer errors, founder time freed	Fairly quick once trained
Customer service	Faster replies, higher conversion, fewer refunds	Moderate
Content or social	More reach and sales over time	Slower and harder to measure
Sales or wholesale	New accounts and bigger orders	Often the longest

Work out the monthly full cost of the role, then estimate the monthly extra contribution it creates. Where the two lines cross is your break-even month. The months before that are the gap. Funding that gap, not a full year of wages, keeps the borrowing proportionate.

If you’ve done the maths and the gap is clear, you can start an enquiry here. It’s quick, and it doesn’t involve a credit check.

How do founders fund the gap?

A line of credit is a natural fit because the gap shrinks month by month. You draw what you need for wages and super while the hire ramps up, then pay it down as their contribution grows. Unsecured and line-of-credit options typically range from $5,000 to $500,000, sized on turnover and bank statements.

A short-term unsecured loan can suit a hire tied to a specific, measurable outcome, such as a new wholesale account that starts shipping in three months.

A bigger, property-secured facility from $20,000 can make sense when the first hire is part of a wider step up: moving to a bigger space, taking on a warehouse, or going full-time yourself at the same time.

Illustrative example: a candle brand’s first packer

Illustrative only. A candle brand ships about 900 orders a month, all packed by the founder at night. She wants to hire a part-time packer at roughly $3,400 a month in wages. With super at 12%, workers compensation and payroll software, the full monthly cost is closer to $4,000.

Freeing 60 hours a month lets her launch a wholesale range she’s been sitting on. She expects wholesale to contribute nothing in month one, around $2,000 in month two and $4,500 by month four. The gap is roughly $4,000, then $2,000, then $1,000 before the hire pays for itself. Instead of borrowing a year of wages, she arranges a modest facility and draws only what those first months need.

Before your first pay run

A quick checklist from the ATO and business.gov.au:

1. Register for PAYG withholding before you make the first payment.
2. Set up Single Touch Payroll-enabled software.
3. Give the new employee the Fair Work Information Statement, plus the Casual Employment Information Statement if they’re casual.
4. Collect a TFN declaration and give them a super standard choice form within 28 days.
5. Arrange workers compensation cover in your state or territory.

What about contractors instead of employees?

Some founders start with a contractor rather than an employee. That can be the right call for genuinely independent work, like a freelance designer or bookkeeper who runs their own business and works for several clients. It isn’t a way around employment obligations. Whether someone is an employee or contractor depends on the real working relationship, not the label on the agreement, and getting it wrong can leave you owing super and entitlements later. Fair Work and business.gov.au both have guidance if you’re unsure.

Freelancers and agencies hiring their first employee may also find loans for freelancers and small agencies useful.

Hiring soon? Let’s make the numbers work

A first hire is one of the best investments a founder can make, as long as the cash is there to carry the ramp-up. If you’d like help funding that stretch, send us a short enquiry. There’s no credit check to enquire, we don’t pass your details around a crowd of lenders, and a real person will call to talk through the timing. Please be precise on the form — revenue, months trading and any property — so we can line you up with the right option straight away. If fulfilment is the pressure point, read about moving to a 3PL as an alternative to hiring.