Christmas shutdown cash flow is the bit nobody puts in the calendar: your sites, shop or clinic close for three weeks, but wages, super and your next BAS don’t take holidays. The money stops coming in before it stops going out, and the squeeze tends to land in January, with the BAS close behind it in February.
The fix is to plan it in November, not discover it in January. Map your cash week by week, bill and chase early, lock in your super dates and ring-fence your BAS money before you shut the laptop.
In Episode 26 of Business Uncut, Reuben walks through a four-step plan to get through the dead zone with your cash intact, using a hypothetical building company to show exactly where the crunch hits.
Key takeaways
- Wages, super and your next BAS keep running while the business shuts for Christmas.
- Map your cash week by week from 1 December to the end of February. A monthly view hides the low point.
- Bill and chase early, schedule super before you shut down, and ring-fence your GST and PAYG withholding.
- For most quarterly lodgers, the October to December BAS is due on 28 February.
Why the money stops before the bills do
We love the Christmas break as much as anyone. But in most businesses, the money stops coming in before the money stops going out. Customers go quiet, the people who owe you money disappear to the beach, and your bank account takes the hit right when you’re least paying attention.
Meanwhile the outgoings keep their usual rhythm. Wages still need paying, super still has to reach the fund and your next BAS is waiting at the end of it all. If cash already feels tighter than your profit suggests in a normal month, it’s worth reading why a profitable business can still run short of cash before the break.
Hypothetical: a 20-person builder’s December
Say, hypothetically, you run a building company with 20 staff and weekly wages of around $60,000. You pay leave before the shutdown, so December’s wage bill is chunky.
Hypothetical example
The monthly view hides the hole. A week-by-week forecast shows the real low point.
Under Payday Super, which is the law from 1 July 2026, the super on those pays has to land in the fund within seven business days of payday. Meanwhile, your progress claims (the bills you send as each stage of a job is done) aren’t getting paid until mid January at best.
And sitting at the end of all that is your BAS, the quarterly return where you pay the GST and the tax you’ve held back from wages. That’s the crunch: heavy outgoings in December, slow receipts in January and a tax bill to settle once the dust clears.
Step 1 Map the dead zone
Build a week-by-week cash flow forecast from 1 December to the end of February. The monthly view hides the low point, because it only shows where you land at month end, not how far you dip in between.
Hypothetically, you might look fine on 31 January but be $40,000 short on 15 January. If you can see the hole, you can fill it.
Step 2 Pull your cash forward
Get every invoice and progress claim out by early December, and chase anything overdue before people go on leave. Once they’re gone, nobody’s approving payments.
The person who signs the cheques (or, these days, approves the transfers) is on a jet ski, not at a desk. Our rule for December is simple: bill early, chase early.
Step 3 Lock in your super dates
Under Payday Super, you have seven business days from each payday to get super into the fund. Public holidays don’t count as business days, so there’s a little give over the break.
But your bookkeeper is on leave too, and payments can take a while to clear. Say, as a hypothetical, your last pay run is Friday 18 December. Schedule that super before you shut the laptop, not when you’re back. Set it and forget it.
Step 4 Ring-fence your BAS money
For most quarterly lodgers, the October to December BAS is due on 28 February. Because it falls after the dead zone, it’s easy to spend that money before the bill arrives.
Every week, move the GST and the PAYG withholding (the tax you take out of wages) into a separate account. It was never your money, so treat it that way.
Plan it in November, not discover it in January.
Bonus: arrange a bank buffer in November
If you need a safety net, talk to your bank about a buffer in November, not in a panic in January. With the Reserve Bank’s cash rate at 4.6% after the September rise, an overdraft isn’t cheap. Treat it as a backstop, not a plan.
If higher rates are already putting pressure on your cash, our five steps to protect your cash flow when rates go up are worth a look before you talk to the bank.
Three traps to avoid
Even with a plan in place, watch for these three:
- Treating December takings as spare cash. A fair chunk of it belongs to the tax office.
- Forgetting super on leave paid in advance. Leave paid before the shutdown still attracts super.
- Assuming clients will pay in the first week of January. They won’t, so don’t build your forecast around it.
Your one action this week
This week
Block out an hour. Open your bank statements from last summer and pencil in every dollar going out between December and February.
That’s your starting forecast. From there, add this year’s pay runs, super dates and BAS, and you’ll see the dead zone before you’re standing in it.
Frequently asked questions
When is the October to December BAS due?
For most quarterly lodgers, the October to December BAS is due on 28 February. It’s where you pay the GST and the tax you’ve held back from wages, so we suggest moving that money into a separate account every week rather than hunting for it in February.
Do I have to pay super on leave paid before Christmas?
Generally, yes. Leave paid in advance still attracts super. Under Payday Super, the super on those pays has to land in the fund within seven business days of payday, so a big pre-shutdown pay run brings a big super payment with it.
Do public holidays count as business days for Payday Super?
No. Public holidays don’t count as business days, so there’s a little give in the seven business day window over Christmas. With your bookkeeper on leave and payments taking a while to clear, we’d still schedule the super before you shut down rather than lean on that give.
How do I forecast cash flow over the Christmas shutdown?
Do it week by week from 1 December to the end of February, because a monthly view hides the low point. Start with last summer’s bank statements, pencil in every dollar going out between December and February, then layer in your invoices, progress claims, super dates and BAS.
Keep reading
Want January covered before you shut down?
We’ll help you build your shutdown forecast before the break, so you head into Christmas knowing January is covered.
General information only, not personal tax, legal or financial advice. Figures are hypothetical examples. Talk to your adviser about your own situation.
