The hour you sell is not the hour you pay for — and since July, the difference shows up in your account a lot faster.

Almost every service business has a number in its head that works like this: we charge somewhere around this per hour, we pay our people somewhere around that per hour, and the space in between is the business. It is the number people quote off, the number they argue about in the car, and the number they use to decide whether a job was worth doing.

It is also, in most cases, wrong in the same two ways — and since 1 July this year one of those two ways has started arriving faster than the businesses making it are used to.

Mistake one: the rate is not the cost

The hourly rate on someone's payslip is the part of their cost that they can see. It is not the part you pay. Sitting on top of it, in Australia, is a stack that varies by award, by state and by how big your payroll is, but always exists.

• Super, at 12% of qualifying earnings. That rate is now at its legislated end point — there are no further increases scheduled — so it is at least a number you can finally treat as fixed.
• Workers compensation, priced off your industry and your claims history, which means the business down the road doing similar work can genuinely have a different number to yours.
• Leave, in whichever form your award delivers it. Permanent staff accrue annual leave, personal leave and public holidays, so the hours you pay for exceed the hours anyone attends. Casuals get a loading instead, which is the same cost bought up front rather than accrued.
• Payroll tax, if your wages bill clears your state's threshold — a step change rather than a gradual one, and one that catches businesses in the year they grow into it.
• The equipment, insurance, phone, vehicle and consumables that only exist because that person is on the road.

The honest version of this exercise is not to reach for an industry multiplier. It is to open your own payroll and your own P&L and build your own number, because a multiplier borrowed from someone else's business is just a more confident guess. What you want at the end is one figure: what one hour of one person's attendance actually costs you, all in.

Mistake two: the denominator, which is the expensive one

Even a carefully loaded hourly cost is misleading, because of what you divide it by. Most people divide by paid hours. The number that matters is billable hours, and the two are never the same.

Between the hours you pay for and the hours you invoice sits everything that is genuinely work and genuinely unsellable: travel between sites, loading and unloading, the trip to the supplier, quoting jobs you do not win, going back to fix something, the ten minutes on the phone with a customer who is upset, the toolbox talk, the day a client cancels at 6am and there is nothing to slot in.

This is why two businesses with identical wage rates and identical charge-out rates can have completely different years. The one with tight runs, well-planned routes and a high strike rate on quotes is selling a much larger share of the hours it pays for. Nothing about that shows up in the rate comparison people actually make.

It is also why the ratio is worth more attention than the rate. Lifting your charge-out rate is a conversation with every customer you have. Lifting the proportion of paid hours that are billable is a conversation with yourself, and it usually has more room in it.

What changed on 1 July

Everything above has been true for years. What changed this financial year is the timing, and timing is where most small businesses actually get hurt.

Payday Super started on 1 July 2026. Employers now pay super guarantee on each payday rather than quarterly, and a contribution counts as on time only if the employee's fund has received it within seven business days of payday — with some exceptions, such as new starters. The calculation base is now qualifying earnings, a broader term that pulls in ordinary time earnings along with things like commissions and salary sacrifice amounts. Both the earnings and the liability are reported through Single Touch Payroll, and the super guarantee charge is what applies when the money does not land in time.

Read that as an operator rather than as a bookkeeper and the consequence is simple. The cost of employing someone has not changed. When it leaves your bank has changed completely.

The float nobody admitted was a float

Under the old quarterly cycle, super accrued on every hour worked but sat in the business account for up to three months before it was paid. For a business with a decent wages bill, that balance was not small — and a great many businesses were, without ever deciding to, running on it. It smoothed a slow month. It covered a van repair. It absorbed the customer who pays at sixty days when the award says you pay staff weekly.

A gap between when a cost is incurred and when it is paid does not feel like borrowing. It feels like having money. That is exactly what makes it dangerous to lose without noticing.

That gap is now about a week. The business that was quietly relying on it did not become less profitable on 1 July — its profit and loss is unchanged. Its cash position is meaningfully tighter, permanently, and the first real test lands in whichever month combines a slow debtor with an unexpected bill.

There is a version of this that is straightforwardly good news, and it deserves saying: the change exists because unpaid super was a real problem, and money reaching a fund within days of payday rather than months later is unambiguously better for the person who earned it. Compounding for a decade on the earlier balance is not nothing. This is a fix for a genuine harm — it just happens to remove a cushion that a lot of small operators had built their week around without ever calling it one.

What to actually do about it

None of this needs a project. It needs an afternoon, and most of it you only do once.

• Build the loaded cost of one attended hour for each role you employ, from your own numbers rather than a rule of thumb.
• Work out what share of paid hours you actually invoice, over a real period — a quarter, not a good week. This is the number that will surprise you.
• Divide one by the other. That is what a sellable hour costs you, and it is the only figure your charge-out rate should be compared against.
• Look at the jobs you priced before July on the assumption that cash arrives before super leaves. Fixed-price contracts running for another year are where that assumption is now hiding.
• Check that your payroll software is doing the new cycle properly, and that the money is landing inside seven business days rather than merely being sent on time. Received is the test, not sent.

And the caveat that matters: awards differ, states differ, and your circumstances are not general. This is the operational shape of the change — the specifics of your obligations belong with your bookkeeper or accountant, and the ATO's own material on Payday Super is the source worth reading rather than anyone's summary of it, including this one.

Why we care about this one

Extrua is a software studio that also runs a real Sydney cleaning business, so this particular change turned up in our own accounts before it turned up in a blog post. The part that consistently trips people is not the super rate. It is the denominator — almost nobody knows, without going and looking, what proportion of the hours they pay for actually end up on an invoice. In Dispatch, crews clock on and off from their phones with GPS, so the start and finish times on a job are recorded rather than remembered. That does not calculate your labour cost for you, and it would be overselling it to say otherwise — but it does give you the one input the whole calculation depends on, which is what the hours honestly were.

The wider point is the one worth keeping. The gap between your rate and your staff's rate is not your margin, it never was, and this year the difference between those two numbers stopped being a slow-moving accounting question and started being a cash-flow one. Businesses do not usually fail because a job was underpriced by a few dollars an hour. They fail because the money left earlier than the plan assumed.