Earned Wage Access (EWA): Impact on employee retention and hiring

Earned Wage Access (EWA), which is alternatively known as early wage access or on-demand pay, is a financial service that allows employees to access their earned income before the company’s scheduled payday. This financial service has gained significant popularity in recent years as more employers adopt employee benefits that increase the financial wellness of their employees. In fact, roughly 25% of payroll professionals said EWA is a must-have solution for improving a company’s employee experience.  

EWA resembles a payday loan or personal loan, without the high interest rates and strict repayments. The process of accessing earned wages through EWA varies depending on the provider. Some providers allow employees to access their wages through an app, while others provide a debit card or bank transfer. The fees associated with EWA also vary depending on the provider and employer, but they are lower than fees associated with payday loans, overdraft fees, or credit cards.  

Let’s use Paytime as an example. We integrate with a company’s existing payroll system free of cost, meaning no changes need to be made. And we’re transparent about our fees, we charge a withdrawal fee akin to an ATM fee! This can either be paid by the employer or employee.   

One of the main benefits of EWA is that it can help employees avoid destructive financial methods that can exacerbate their financial difficulties or cause a ‘debt cycle.’ A debt cycle refers to when an individual can’t pay off one debt, say a mortgage repayment, so uses another financing method and uses that capital to pay off the first debt, such as a credit card. Over time, the individual continues to sink further and further into debt making it incredibly difficult to get out of the cycle.  

Unfortunately, many individuals live pay-check to pay-check and may not have access to credit or savings to cover unexpected expenses. This has only been exacerbated with the sky-rocketed interest rates and unparalleled cost of living. Without EWA, these individuals (who are also employees) may have no option other than resorting to a high-interest loan or credit card to cover their expenses, which can lead to the discussed debt cycles and financial instability.  

In addition to providing viable financing solutions for employees, EWA can also benefit employers by improving employee retention and reducing absenteeism. When employees have access to their earned income, they are able to manage expected and unexpected expenses, providing them with the ideal budget management needed to reduce financial stress, which can lead to improved mental health and, in turn, job satisfaction. An employee who feels taken care of and appreciated is an employee who will be loyal and productive. Financial peace of mind is known to create a better employee experience, balance work and personal life, and encourage more positive interactions with colleagues and customers.   

Don’t believe us? Don’t take our word for it! According to PwC’s wellness study, 1 in 4 employees has been distracted from work by their personal financial situation. Of the workers who were distracted, almost half spent over three working hours thinking about how to handle or resolve their financial problems. Consider the significant amount of company time that is wasted by this distraction, as well as the lower quality of life for those employees! 

Without financial stress weighing on their day to day activities, employers can better focus on their place at a company and their responsibilities at work. Lower turnover rates and reducing absenteeism also saves employers a tonne of money – making EWA a win-win modern day solution. 

In fact, large U.S.companies such as Walmart and Uber have already implemented EWA programs for their employees. The EWA usage data shows us that employees use immediate access to their income for:  

  • 27% on emergencies
  • 24% on groceries
  • 22% on bills
  • 14% on rent 
  • 13% on other


Demonstrating that the improved cash flow is used responsibility – the capital is used so they don’t fall into a debt cycle and don’t have late payments (which in turn promotes a good credit score). 

Offering EWA also provides employers with a strong competitive advantage. With employee programs moving away from the standard annual leave and superannuation to focus on personalised employee experiences, EWA as an employee perk can work to attract top-tier talent as they feel comfort in knowing if and when an unexpected expense occurs, such as an car accident or serious health complication, their organisation offers the tools needed for the situation to not throw out their budget or cause financial harm.  

Overall, integrating EWA provides financial support for employees and works to provide employees with a competitive advantage as employees know the company takes care of its stakeholders. Employees are in turn motivated to work and have less distractions to impair their productivity,  improving employee retention and reducing absenteeism.