Christmas Shutdown Cash Flow: How Small Businesses Get Through December and January
Most Australian small businesses lose three to six weeks of revenue between mid December and late January while wages, rent, loan repayments and super keep running. The fix is to know your dates, collect what you are owed before 18 December, hold back cash for the 21 December and 21 January BAS payments, and have a facility approved before you close, because lenders slow down too. If David Jones, a 188-year-old retailer, can run out of room in a rent negotiation and land in administration on 5 November 2026, a 12-person business with two weeks of cash in the bank is not safe either.
- Quarterly BAS for October to December 2026 is due 28 February 2027, effectively Monday 1 March. Monthly lodgers pay on 21 December and 21 January.
- Payday Super since 1 July 2026: 12% super leaves within 7 business days of every pay run. No quarterly float.
- Most awards need 28 days written notice for a shutdown. Construction on-site award needs two months.
- Lender credit teams thin out from about 19 December. Apply in November if you want money before the break.
Why David Jones matters to a business a thousand times smaller
On 5 November 2026 David Jones appointed McGrathNicol as voluntary administrators, and its main lender appointed FTI Consulting as receivers. The stores are still open while the receivers review the business. Reports put 12 to 20 of its Australian and New Zealand stores at risk, and the trigger was a rent negotiation with Westfield that broke down.
Strip away the size and the story is the one we see every January. Sales softened. Rent did not. The landlord conversation happened late, from a weak position, and the business ran out of time before it ran out of ideas. A department store has lawyers and a board. A cafe, a childcare centre or a plumbing business has the owner and a bookkeeper. The difference is not the problem, it is how early you act on it.
Rent is the fixed cost most owners never renegotiate because it feels non-negotiable. It is negotiable in October with six months of clean statements and a plan. It is not negotiable on 22 December with a bounced direct debit.
The dates that bite between now and February
Write these on the whiteboard. The Christmas shutdown is not one quiet fortnight. It is a seven-week stretch where cash goes out on a schedule and comes in when customers feel like it.
| Date | What happens | Cash impact |
|---|---|---|
| By 23 November 2026 | Last day to give 28 days written notice for a shutdown starting 21 December under most awards | Staff direction to take annual leave is only valid with notice |
| Around 18 December 2026 | Last realistic day to get paid before accounts teams close | Invoices not paid by now usually wait until late January |
| 21 December 2026 | November monthly BAS due | GST and PAYG withholding out, during your lowest trading week |
| Each payday | Super due within 7 business days of pay (Payday Super) | 12% on top of every wage run, including leave paid in advance |
| 25 and 28 December 2026, 1 January 2027 | Public holidays (Boxing Day substitute on the Monday) | Penalty rates if you trade, paid leave if you close |
| 21 January 2027 | December monthly BAS due | Falls before most B2B customers have paid December invoices |
| 26 January 2027 | Australia Day public holiday | Another short week in the slowest month |
| 1 March 2027 | October to December quarterly BAS and PAYG instalment due (28 February is a Sunday) | Often the single biggest ATO payment of the year, funded from January trading |
Monthly BAS dates apply to monthly lodgers. Quarterly lodgers pay on 1 March. Confirm your own dates in ATO online services.
How much cash to hold back
The number most owners get wrong is not December. It is the gap between the last good week of trading and the first good week of collections. For most trades, services and B2B businesses that is 18 December to around 27 January. Six weeks.
| Item | Six weeks | Note |
|---|---|---|
| Wages and 12% super | $68,000 | Eight staff, including leave loading of 17.5% on annual leave under many awards |
| Rent and outgoings | $13,500 | Does not pause |
| Loan and equipment repayments | $9,000 | Direct debits do not know it is Christmas |
| November BAS (21 December) | $11,000 | Monthly lodger example |
| Insurance, software, phones, vehicles | $6,500 | Fixed |
| Total out | $108,000 | |
| Revenue actually collected in the window | $45,000 | Roughly a quarter of normal |
| Gap to cover | $63,000 | From cash reserves, collections before 18 December, or a facility |
If that gap is bigger than the cash you will have on 18 December, you have three levers: pull revenue forward, push costs back, or arrange a facility. Do all three. The business overdraft calculator shows what a $63,000 draw for six weeks actually costs, which is usually less than owners expect because interest is only charged on the drawn balance.
Collect before you close
An invoice you issue on 25 November on 30-day terms falls due on 25 December. Nobody in accounts payable is working that day. In practice it gets paid in the last week of January, after their first BAS run. So:
- Invoice every completed job by 1 December, not at month end.
- Call, do not email, every debtor over $5,000 in the first week of December and ask for payment by 18 December.
- For large December orders, ask for a deposit or progress payment up front. Most customers accept it when you explain the shutdown.
- If you offer early payment discounts, December is the month to use them. Two per cent for payment inside seven days is cheaper than six weeks of interest.
- Retail and hospitality: stop extending accounts to regulars in December. Card at the counter.
Staff: leave, leave loading and payday super
If you shut down, you can direct award-covered staff to take annual leave, but only with written notice, and most awards fixed that notice at 28 days from 1 May 2023. The on-site construction award wants two months. Staff who do not have enough leave accrued cannot simply be stood down without pay unless the award allows it. You agree in writing to unpaid leave, leave in advance, or you pay them.
Budget for leave loading. Many awards add 17.5% to annual leave pay, so a $1,500 week of leave costs $1,762 before super. Then add 12% super on the lot, paid within 7 business days under Payday Super. The old trick of paying December quarter super on 28 January is gone. If you process the pre-Christmas pay run on 19 December, the super leaves by 31 December.
Rent, suppliers and the ATO: who to talk to first
Landlord first. This is the David Jones lesson. If January is going to be tight, ask in November for a rent deferral across January and February with catch-up over the following four months. Landlords say yes to a tenant who has never missed and asks early. They say no to one who has already bounced.
Suppliers second. Ask your three largest suppliers for 60-day terms on December orders. Do it before you place the order. Most will trade a longer term for a firm order in a quiet month.
ATO last, and with care. An ATO payment plan is easy to set up and looks cheap. It is not. The general interest charge is 11.51% p.a. for the October to December 2026 quarter, it compounds daily, and since 1 July 2025 it is not tax deductible. The ATO also stops accepting credit cards after 30 June 2027, so the points-and-float workaround is on borrowed time. The comparison with an overdraft is in our ATO tax debt and business overdraft guide.
Overdraft or loan for a six-week gap
A six-week hole is what a business overdraft is built for. You draw what you need in the week it is needed and repay as January collections land. A term loan hands you the full amount in December and starts weekly or daily repayments immediately, so you are repaying during the exact weeks you have no revenue.
| Option | Cost | Repayments | Best for |
|---|---|---|---|
| Unsecured business overdraft | From 14.55% p.a. on the drawn balance only, line fee on some products | Flexible, repay as cash comes in | A gap you will close by February, $10,000 to $500,000 |
| Unsecured business loan | Fixed rate or factor rate, 12 to 36 months | Weekly or daily from the first week | A known one-off cost such as a fit-out or stock buy, not a gap |
| Invoice finance | Fee per invoice, typically 1% to 3% a month | Settled when the debtor pays | B2B businesses with $20,000+ in unpaid invoices from strong customers |
| ATO payment plan | 11.51% p.a. GIC, compounding daily, not deductible | Weekly, fortnightly or monthly instalments | Last resort, and never for a debt an overdraft could clear |
Rates are lender-published minimums and indicative. Every facility is assessed case by case on six months of bank statements. Overdrafts up to $150,000 generally need no tax returns or property security.
What we have seen
The October settlements on our results page tell the story of businesses that moved early. A regional NSW cafe took a $100,000 unsecured overdraft in October ahead of the summer trade, so it could stock up and pay casual staff through the holidays without watching the account. Three childcare operators in NSW settled facilities of $150,000, $200,000 and $300,000 in the same month, because centres carry full wage bills through January while family fees dip and enrolments reset.
The other pattern is the construction subcontractor who downs tools on 19 December, lodges the December progress claim, and does not see the money until the builder's accounts team pays it in the last week of January. That is five to six weeks of wages and equipment finance with nothing coming in. The ones who had a $50,000 to $75,000 overdraft approved in November drew $30,000 in January and repaid it in February. The ones who did not are the January phone calls, and January approvals take longer because the statements now show the stress.
Do this in the next two weeks
- Put the dates in the table above into your calendar with a reminder a week before each one.
- Build a simple 13-week cash flow from now to the end of February. Inflows by week, outflows by week, closing balance. A spreadsheet is enough.
- Issue every outstanding invoice this week and call every debtor over $5,000.
- Send shutdown notices to staff now if you have not already. You may already be inside the 28 days.
- Talk to your landlord and your three biggest suppliers about January terms before you need them.
- If the 13-week sheet shows a gap, apply for a facility in November while your statements are clean and lenders are fully staffed. Approval is faster, and you are not obliged to draw it.
Rates went up again on 3 November, the fifth rise this year. Our RBA cash rate guide covers what 4.85% does to the cost of carrying stock and debtors through this period.
Frequently asked questions
When is the October to December 2026 BAS due?
The quarterly BAS for October to December 2026 is due on 28 February 2027. That date falls on a Sunday, so the effective deadline is Monday 1 March 2027. Monthly lodgers have the November statement due 21 December 2026 and the December statement due 21 January 2027. The December quarter PAYG instalment is paid with the quarterly BAS.
Do I still have to pay super over the Christmas shutdown?
Yes. Under Payday Super, which started on 1 July 2026, the 12% super guarantee must reach each employee's fund within 7 business days of every payday, including the pre-Christmas pay run and any leave paid in advance. The old quarterly deadline of 28 January no longer gives you a float, so super leaves your account with the wages.
How much notice do I need to give staff for a Christmas shutdown?
Most modern awards require at least 28 days written notice before directing employees to take annual leave for a shutdown, and the Building and Construction General On-Site Award requires two months. For a shutdown starting 21 December 2026 that means notice by 23 November 2026 under most awards. Check your award, and agree in writing on unpaid leave or leave in advance for staff without enough accrued leave.
Can I get a business overdraft approved before Christmas?
Yes, if you apply in November or the first half of December. Non-bank lenders assess on six months of bank statements, an ABN and a driver's licence, with decisions from 1 hour and most facilities funded inside 24 to 48 hours. Lender credit teams run skeleton staff from about 19 December, so an application lodged on 22 December may not settle until mid January.
Is an ATO payment plan cheaper than a business overdraft?
Usually not once tax is factored in. The ATO general interest charge is 11.51% p.a. for the October to December 2026 quarter, compounds daily, and has not been tax deductible since 1 July 2025. Unsecured business overdrafts start from 14.55% p.a., charge interest only on the drawn balance, and the interest is normally deductible. On a $40,000 BAS carried for 60 days the overdraft is often the cheaper option after tax.
What happened to David Jones and why does it matter to a small business?
David Jones appointed McGrathNicol as voluntary administrators on 5 November 2026 after talks with its key landlord Westfield broke down, and its main lender appointed FTI Consulting as receivers. Stores keep trading while 12 to 20 closures are reported as likely. The lesson for a small business is that rent and fixed costs do not pause when sales do, and that negotiating from a cash position is far easier than negotiating from a crisis.
Want the gap covered before you close?
Unsecured business overdrafts to $150,000 on six months of bank statements, larger facilities case by case. Decisions from 1 hour. One application, one credit enquiry, free to you.
Talk to a broker Run the overdraft calculatorSources
- ATO, Due dates for lodging and paying your BAS: https://www.ato.gov.au/business/business-activity-statements-(bas)/due-dates-for-lodging-and-paying-your-bas/
- ATO, Payday Super (from 1 July 2026): https://www.ato.gov.au/businesses-and-organisations/super-for-employers/payday-super
- ATO, General interest charge rates, October to December 2026 quarter: https://www.ato.gov.au/tax-rates-and-codes/general-interest-charge-rates
- Fair Work Ombudsman, Rules and entitlements during the end-of-year holiday season: https://www.fairwork.gov.au/newsroom/news/rules-and-entitlements-during-end-year-holiday-season
- ABC News, David Jones calls in administrators, 5 November 2026: https://www.abc.net.au/news/2026-11-05/david-jones-collapses-into-voluntary-administration/107347878
- Reserve Bank of Australia, Statement by the Monetary Policy Board, 3 November 2026: https://www.rba.gov.au/media-releases/2026/mr-26-30.html
Lender rates, fees and eligibility are indicative, as at 7 November 2026, and every application is assessed case by case. ATO and Fair Work dates should be confirmed for your own lodgment cycle and award. This page is general information, not financial, tax or legal advice.
John Pierre Saliba
Director and Senior Finance Broker, OverdraftMe
Accredited finance broker with OverdraftMe, a brand of Lend & Loan Pty Ltd (Australian Credit Licence 511092). MFAA Member. AFCA Member. Bachelor of Business and Commerce, Advanced Diploma in Financial Planning, Diploma of Finance and Mortgage Broking Management. John has facilitated over $700 million in finance across his career and personally reviews every OverdraftMe enquiry. Based in Drummoyne, Sydney, as a Sydney business overdraft broker, and working with businesses in every state by phone and online. LinkedIn
Last updated 7 November 2026. Reviewed by John Pierre Saliba, Director and accredited finance broker, ACL 511092.