The 2026 Small Business Cash Flow Squeeze: Payday Super, the Surcharge Ban and the End of ATO Card Payments

By John Pierre Saliba · Last updated 21 October 2026 · OverdraftMe · ACL 511092

• 1 July 2026: super due within 7 business days of payday. 1 October 2026: card surcharges banned. After 30 June 2027: no credit card payments to the ATO.
• Illustrative cafe at $45,000 a month: about $20,000 less cash in a BAS month than a year ago, and about $7,300 a year of card fees to reprice or absorb.
• ATO general interest charge 11.51% p.a. and not deductible. Business overdraft interest is deductible and only charged on drawn days.
• Facilities we arrange typically land at about one month of turnover.

The three changes at a glance

How do the three changes affect my business?

Not evenly. Payroll size drives the super hit, card share drives the surcharge hit, and the ATO change only bites if the card was your float. Find the closest row.

Payroll-heavy businesses took the biggest single hit in July and may not have noticed, because it arrived as a slightly lower bank balance rather than a bill. Card-heavy businesses feel October every day. Owner-operators with no staff feel December.

Change 1: Payday super took the quarterly float

Before July, super for wages paid in January was not due until 28 April. A business with a $25,000 monthly payroll owed $3,000 a month in super and held each month's amount for between about six weeks and three and a half months before it left. On average, about $7,000 of staff super was sitting in the account and working for the business. Since 1 July 2026 it has to be received by the fund within 7 business days of payday. For a fortnightly payer the amount outstanding at any time is now about $1,500. The difference, roughly $5,500, is cash that left the business once and is not coming back. On a $100,000 payroll the same maths takes out about $22,000.

It is a one-off hit to working capital, not an annual cost, which is why a lot of owners did not feel it until the September quarter, when the last of the old quarterly super and the first of the new payday super overlapped. The detail is in payday super is here: what it means for your business, the payday super calculator sizes it for your payroll, and the payday super business overdraft page covers the facility most employers use to replace it.

Change 2: The surcharge ban moved card costs onto your margin

From 1 October you cannot add a surcharge for eftpos, Visa, Mastercard or American Express, including on payments from other businesses. For a cafe selling a $5.00 coffee with a 1.6% merchant fee, the 8 cents it used to collect at the terminal now comes out of a 30 cent profit. Across a $45,000 a month till with 85% of sales on card, that is about $612 a month, or about $7,300 a year, absorbed unless prices move. The RBA expects the 16% of merchants who surcharged to lift prices, and it cut the interchange caps the same day to bring wholesale card costs down by around $910 million a year. The fix is pricing and a hard look at the merchant statement. The full breakdown, including what you can and cannot still charge, is in what the card surcharge ban means for your business.

Change 3: No more paying the ATO by card

After 30 June 2027 the ATO will not take a credit card. The RBA ban stopped it passing on card fees from 1 October, and it has chosen to end card payments rather than spread the cost across everyone else. Only about 2.3% of tax payments were made by card in 2024-25, but the small businesses in that 2.3% used it for one thing: timing. Put the BAS on the card on day one of the statement cycle and the cash is not needed for up to 55 days.

Pay late instead and the general interest charge is 11.51% p.a. for the October to December 2026 quarter, compounding daily, and not tax deductible since 1 July 2025. On a $15,000 BAS held 55 days that is about $260 of after-tax money. Third-party platforms still let you pay the ATO by card for a fee of about 1.2% to 2.1%, which is a reasonable float tool if the limit is there and you clear it on time. Our guide to the ATO ending credit card payments runs through all five options and the maths, and ATO tax debt and business overdrafts covers what happens once a payment plan is on your file.

One cafe, one year: what the three changes add up to

This is an illustration, not a client. The numbers are typical of a suburban cafe we would see: $45,000 a month in sales, 85% on card, $25,000 a month in wages, a $15,000 quarterly BAS, and about $30,000 a month in supplier and wage payments going out before the month's card settlements fully land.

Twenty thousand dollars is close to half this cafe's monthly turnover. It is the difference between paying the coffee roaster on terms and asking for an extension. None of it shows up in revenue, which is why it catches owners who are busy and profitable.

What can I do about it?

1. Reprice for the card cost, this week. It is permanent, so the fix should be permanent. Spread 1.5% to 2% across the menu or price list. Do not fund a permanent cost with borrowed money.
2. Put super on the same line as wages. In the forecast and in the bank account, treat 12% as part of each pay run. The float is gone, so stop planning as if it exists.
3. Diarise the ATO dates and pay by BPAY or transfer. The first bills most businesses will meet without a card are the 21 January monthly BAS, the 28 February quarterly BAS and the December quarter PAYG instalment.
4. Keep a float you control. A business overdraft sized at about one month of turnover, which is where facilities on our panel typically land, gives you the 55 days the card used to give you, at a deductible rate, with interest only on the days you draw. On a $15,000 BAS held 55 days at 16% p.a. that is about $360, or about $270 after tax at the 25% company rate. An unsecured business overdraft runs to $150,000 on six months of bank statements, with no property security and decisions from 1 hour. If the need is wages and stock rather than tax, a working capital loan is the fixed-term alternative, and how much can I borrow gives you a limit estimate from your turnover.
5. Do not use the ATO as a line of credit. GIC has risen from 10.61% to 11.51% in a year, it compounds daily, it is not deductible, and a payment plan is visible to every lender who reads your statements. One late BAS is a cash flow event. Three in a row is a credit file problem.

The tax angle in one table

On pure dollars the three are close. The card platform is cheapest if the limit and the discipline are there. The ATO plan is nearly as cheap as the overdraft after tax, but it leaves a debt on your record and compounds if anything slips. The overdraft costs a little more than the ATO on a single bill and a lot less than the ATO on the third bill in a row, because the limit is yours, the interest stops the day you repay, and the ATO only ever sees a payment on time. At higher overdraft rates the dollar gap widens, so the rate you are approved at matters; our verified rates table shows where banks and non-banks sit this month. How the deduction works is in is a business overdraft tax deductible. Deductions only help a business that is paying tax, and this is general information, not tax advice.

What we have seen

Since July the enquiries that mention super, surcharges or the ATO in the same sentence have come mostly from hospitality, trades and small transport operators turning over $40,000 to $150,000 a month, across Sydney, Melbourne, Brisbane and regional centres. The common thread is not losses. It is profitable businesses whose cash position on the 15th of the month is $10,000 to $25,000 worse than it was a year ago, for reasons that have nothing to do with sales. The ones in the best shape set up a facility while their statements were clean, repriced early, and used the facility for days, not months. The ones under the most pressure were already two BAS periods into a payment plan when they called, which is still fundable with most of our panel, but at the dearer end of it. The overdraft calculator will show you the cost of a 55 day draw on your own BAS figure, and if you run a cafe our cafe finance page has the eligibility detail. For the broader toolkit, see cash flow management for small business.

Two BAS periods from now is too late to set this up calmly. Talk to JP now, from Drummoyne in Sydney or by phone anywhere in Australia, or check whether you would be approved in two minutes.