Millions of Americans live paycheck to paycheck, and financial stress can negatively affect productivity. Offering earned wage access can help them break the cycle of debt and poverty and give employees peace of mind.
Companies can offer this solution, also known as on-demand pay, by integrating it with HR and payroll technology. Employees can then request wages before their scheduled payday and receive them via bank account direct deposit or onto a payroll card.
Tracking Your Earned Wages
With rising inflation and more people living paycheck to paycheck, many employees need help financially. Many turn to payday loans or high-interest credit cards to make ends meet, which can put them in a cycle of debt they cannot break free from. As a result, more employees seek solutions to help them manage their money and avoid this financial stress. One solution that has gained popularity is earned wage access. Also known as on-demand pay, employees can access a portion of their net wages before their employer’s next payday.
Typically, companies offering this benefit integrate it into their payroll system so employees can easily use it. It is commonly used by employees who work various jobs, including those in the gig economy or self-employed. In addition to helping them avoid the risk of predatory lending, on-demand pay can also improve employee attendance and morale by eliminating the need to seek out other sources of income.
Earned wage access platforms can be integrated with various software types, including accounting packages, human resources services, and payment processing systems. Some providers even offer a mobile app that helps employees track their daily time and earnings. This allows them to access their wages in real-time, alleviating their financial stresses and preventing them from taking on more shifts than they can handle.
Tracking Your Time
Time tracking is vital for any freelance or contract worker compensated by the hour. It’s also a crucial tool for project management teams to keep tabs on how their projects progress so they can deliver on their client commitments, stay within budgets, and hit deadlines.
The good news is that it’s easier than ever to use a time-tracking app or desktop application to record time. There are many ways to do this, from a simple spreadsheet template to digital timer apps that automatically start and stop. Regardless of your chosen method, selecting a solution that securely and accurately records and stores data as needed is essential.
On-demand pay is a powerful new tool to help employees ease the stress of living paycheck to paycheck and break free from crippling cycles of debt. Employees can access a portion of their wages as soon as needed, with most services offering same-day or next-day transfers to the employee’s bank account.
This is an excellent option for businesses to offer employees as part of their benefits package or as an added perk. It also benefits other business stakeholders, such as billers, who can avoid late fees and overdraft charges from employees using high-cost forms of credit to cover costs until their next payday.
Tracking Your Expenses
Creating a budget and tracking your expenses is the best way to ensure you don’t overspend. You can find various expense-tracking spreadsheet templates online to help you stay organized. Keeping track of your expenses will help you identify patterns in your spending and allow you to see where the excess is coming from so you can make some changes.
Many hourly workers live paycheck to paycheck, making it challenging to keep up with expenses and pay bills. They are at risk of predatory debt cycles and financial instability. New tools like earned wage access (EWA) and payday advance apps are popping up to give employees extra cash before payday.
However, these products can also harvest personal data and sell it to credit agencies or other third parties. Employers must offer an alternative, healthy, safe solution for their workforce.
Instead of a payday advance app, try offering a fast payroll service that is safe and convenient for your employees. For example, Branch offers a simple earned wage access solution that lets employees access to part of their wages before payday, improving their financial well-being. It’s easy for employers to implement and provides employees a secure way to get the cash they need without waiting for bi-weekly or monthly paychecks.
Tracking Your Taxes
With the rising inflation rate, it’s more important than ever for employees to access their earned wages in real time. Most hourly workers live paycheck to paycheck, so a delay in payroll can devastate financial well-being.
Fortunately, the recent rise in the popularity of Earned Wage Access (EWA) has helped to ease some of these challenges for many Americans. EWA platforms, also known as on-demand pay or instant pay, allow employees to withdraw their earnings before their next bi-weekly or monthly payday.
The EWA marketplace offers two primary options- employer and employee-based solutions and direct-to-consumer models. Employer and payroll-integrated EWA platforms provide early access to earned wage funds in exchange for a flat-rate service fee of $5-10 per month or a one-time transaction fee based on the amount accessed. On the other hand, the direct-to-consumer model allows individuals to take advantage of on-demand wage advances without having their employer or business partner in place as a middleman.
With the COVID-19 pandemic causing absenteeism and a growing number of employees seeking alternative employment, many companies are turning to advanced payment technology like Earned Wage Access to improve employee retention. Despite the additional work that may require human resources, offering flexible access to paychecks can help employees save money on interest and overdraft fees and avoid the stress of living paycheck-to-paycheck.
Millions of Americans live paycheck to paycheck, and financial stress can negatively affect productivity. Offering earned wage access can help them break the cycle of debt and poverty and give employees peace of mind.
Companies can offer this solution, also known as on-demand pay, by integrating it with HR and payroll technology. Employees can then request wages before their scheduled payday and receive them via bank account direct deposit or onto a payroll card.
Iskra Banović is our seasoned Editor-in-Chief at Blufashion. She has been steering the website’s content and editorial direction since 2018. With a rich background in fashion design, Iskra’s expertise spans across fashion, interior design, beauty, lifestyle, travel, and culture.
