Quick answer
When you're hiring ahead of the revenue a new person will bring in, an unsecured business loan sized to cover the ramp-up period is usually the best fit: it's a defined cost over a defined time. A line of credit suits businesses hiring in waves or with uneven income. Property-backed working capital makes sense for bigger teams or newer businesses with limited trading history.
Key points
- Fund the ramp-up gap, not the whole salary forever.
- Count super at 12%, workers compensation, leave and payroll tax where it applies.
- From 1 July 2026, super is paid with wages under payday super, which changes cash timing.
- An unsecured loan suits a known ramp-up; a line of credit suits waves of hiring.
- Our pick
- Unsecured loan sized to the ramp-up
- Runner-up
- Business line of credit
- Count
- Super at 12% of qualifying earnings
Hiring is a bet on the future. You pay the new person from their first week, but the extra sales, the jobs they can take on, or the hours they free up for you take time to show up in the bank account. Funding that gap well is the difference between a hire that grows the business and one that strains it.
What does a new hire actually cost?
Salary is only the start. The business.gov.au guide to hiring employees lists the main costs:
- Wages at or above the relevant award rate.
- Superannuation. The ATO sets the super guarantee at 12% of qualifying earnings for both 2025–26 and 2026–27.
- Workers compensation insurance, required in every state and territory.
- Payroll tax, if your total wages exceed your state’s threshold.
- Leave entitlements, equipment, training and recruitment costs.
There’s also a timing change. From 1 July 2026, payday super requires employers to pay super with each pay run, and it must reach the employee’s fund within 7 business days. Super no longer sits in your account for up to three months.
Which structures can fund a hire?
- Unsecured business loan. A lump sum to cover the ramp-up period, repaid over a set term.
- Business line of credit. Draw as payroll is due, repay as revenue lifts.
- Property-secured working capital. Larger, longer facility backed by property.
- Cash reserves. Funding the hire from retained profits.
| Test | Unsecured loan | Line of credit | Property-secured | Cash reserves |
|---|---|---|---|---|
| Suits | One hire, known ramp-up | Several hires or uneven income | Bigger teams, newer businesses | Strong balance sheet |
| Security | Director guarantee | Director guarantee | Property | None |
| Flexibility | Fixed sum and term | High | Moderate | Total |
| Risk | Repayments outlast ramp-up | Limit becomes permanent | Property on the line | Thin buffer |
Our verdict on funding a new hire
Our verdict: an unsecured loan sized to the ramp-up
- Best for
- Established trading businesses hiring one or two people whose contribution can be estimated, such as a tradesperson, salesperson or second chef.
- Not for
- Hiring to cover a business that's already losing money, or roles with no clear link to revenue or savings.
- Check before you sign
- Repayment frequency against your pay cycle, the total repayable, and whether you can pay out early once the hire is productive.
A defined loan wins for a single hire because the cost is defined too. You can estimate the months before the new person covers their wages and on-costs, borrow for that window, and repay from the revenue they create.
A line of credit is the runner-up and the better choice if you’re hiring in waves, have seasonal peaks, or can’t be sure exactly when the new person will start contributing. You draw only what payroll needs.
Property-secured working capital makes sense when the hiring is larger, such as staffing a new site, or when the business is too young for statement-based lending to stretch far enough.
Our recruitment finance verdict goes deeper on the structure, and the Best Biz Loan Finder can rank options against your answers. Or tell us about the role you’re filling.
Illustrative example: an electrician hiring a second qualified sparky
Illustrative only. A sole electrician is turning down work. Adding a second qualified electrician would let the business take on two jobs at once, but the new hire needs a van, tools and a few months to build a full schedule.
The owner estimates four months before the new electrician’s billable hours cover their wages, super and on-costs. He funds the van with asset finance and the ramp-up with a small unsecured loan over a term slightly longer than the ramp-up, leaving room if work is slower to build than expected.
Verdict for this owner: asset finance for the van, an unsecured loan for the wage gap.
How do you size the borrowing?
- Estimate the full monthly cost of the hire: wages, super, insurance, payroll tax where relevant.
- Estimate how many months before their work covers that cost.
- Multiply, add equipment and recruitment, and add a margin for a slower start.
Our guide to the real cost of your next hire walks through this with a worked example. If the hire is tied to a specific new contract, read the best way to fund a big contract as well.
What mistakes do owners make when funding a hire?
- Borrowing for the whole year’s salary. You only need to fund the gap before the role pays its way. Borrowing more just adds cost.
- Forgetting super timing. With payday super from 1 July 2026, super goes out with every pay run. A plan built on quarterly payments will run short.
- Ignoring the slow months. If the new person starts just before your quiet season, the ramp-up takes longer. Time hires for when demand is building.
- No review point. Set a date, perhaps three months in, to check whether the role is paying back as planned. Adjust early if not.
- Funding a hire to fix a cash problem. If the business is already struggling to pay its current team, more staff on borrowed money rarely helps.
A good hire funded well can lift the whole business. The goal is a facility that covers the ramp-up and then gets out of the way.
Ready to grow the team?
When you know the role and the ramp-up, finding the right structure is a short conversation. Start your enquiry and one specialist will work through the numbers with you.
We don’t run a credit check when you first enquire, and we don’t hand your details to a queue of lenders. Tell us the role, the expected start date and your honest trading figures, and you’ll get an option that fits the hire, not a generic quote.
Frequently asked questions
Can I borrow money to pay wages?
Yes, business loans can be used for wages, including the cost of bringing on new staff. The sensible approach is to borrow for the period before the new hire is earning their keep, with a clear view of when their work will cover their cost.
How long does it take a new employee to pay for themselves?
It depends on the role. A salesperson or tradesperson may bring revenue within weeks; an apprentice or an admin role may take longer or save money rather than earn it. Estimate the ramp-up honestly and borrow for that window.
What is payday super and does it affect hiring?
From 1 July 2026, employers must pay super at the same time as wages, and it must reach the employee's fund within 7 business days. That means super leaves your account every pay run rather than quarterly, which matters when planning cash for new staff.
Is recruitment finance different from a normal business loan?
Usually it's an unsecured loan or line of credit used for hiring costs. What matters is matching the amount and term to the ramp-up. Our recruitment finance page covers the details.
What costs should I include besides salary?
Super guarantee, workers compensation insurance, leave entitlements, payroll tax if you're over your state's threshold, equipment, training and recruitment fees. The business.gov.au hiring guide lists the main ones.