Workers Access Wages before Payday for Basic Needs and Seek Perks to Save Cash

Cash-strapped Aussies are struggling to last until payday, with more workers now accessing their salaries early to help make ends meet. Demand for earned wage access programs. which allow workers to receive their pay as soon as they e-dm it rather than wait until their usual payday, has skyrocketed this year. “We’re not seeing people use (these programs) for ridiculous things” says Steven Furman, Chief Executive Officer of Paytime, which is signing more than 1000 employers to its service each month to allow their workers early access to pay. These are people that may have had a flat tire in the morning on their way to work and … couldn’t afford to get it fixed. Or an employee that had to have a medical procedure that cost him $500 (in) out-of-pocket (expenses) so then he couldn’t afford to pay his phone account.  People’s savings are getting more and more depleted and, if they have an expense that they haven’t budgeted for, and they’re not getting paid for another two or three weeks, they no longer have the savings (to pay for unexpeted costs).

Vicious Cycle

Furman says wage access programs are preferable to an overdrawn account because they do not incur high fees or daily interest charges. Unlike a loan, the money is owned by the worker and is just accessed earlier than their pay cycle would otherwise permit, he says. “It’s a timing issue. more than anything else.” he says. The less (frequently) you pay your staff, the harder it is to budget And it becomes a vicious cycle. “The feedback we are hearing from employees is that. ‘This has really saved me’ or ‘It’s really helped me get out of a pickle’.”

Employers must sign up for the Paytime model to give their workers early access to up to 50 per cent of their earned salary. Each withdrawal incurs a small lee (similar to an ATM fee) that is met by the worker or their company. Furman says workers typically tap into their wage through Paytime three times a month, although it depends on an individual’s pay cycle. Phet Rakcheep, 22, works for an engineering company in Brisbane and has used on-demand pay services to cover emergencies such as a high powerbill. “It’s really helped me,” he says.

Struggling to Wait for Wage

  • 81% of Aussie workers want the opportunity to access their earned salary before payday
  • 83% say their mental wellbeing would improve if they could access earned pay when it suites them
  • 73% would feel more in control of their finances if they could access earned pay sooner
  • 68% say they would be more productive at work if allowed to access their earned pay when they need it

Work Perks

With employers also battling inflation, and unable to hand out big pay rise non-financial benefits are also being offered to help save staff money. From gym memberships and discounted health insurance to free breakfasts and shopping vouchers, companies are looking for more innovative ways to help make the lives of their employees easier. Depending on what’s offered, the perks could save workers more than $2000 a year, says Ross McDonald, Australia country manager at rewards platform Perkbox. “Pay is definitely important but it’s also not everything… (work perks) are an area where employers can help employees make considerable savings to the household budget,” McDonald says.

“It can help (workers) to save a lot of money, particularly if employers can’t afford to give everyone a $2000 pay rise.” Beauty clinic owner Sheryl Perez offers free treatments to her employees and their dose family, as well as heavy discounts for extended family. Some or the facial treatments are worth hundreds of dollars. She also throws in a $200 monthly cash allowance for personal grooming because staff have to look the part for their job. “That’s one less cost for them to worry about,” says Perez, owner of Beauty Hub Sydney.

Desire for Travel

Research from Corporate Traveller reveals travel is the most desirable non-monetary benefit for employee ahead of other perks that are arguably better for household budgets, such as extra paid leave days, help to meet commuting costs and company-paid meals and snacks. “For most people, travel isn’t really discretionary-it’s a necessity.” says Corporate Traveller global managing director Tom Walley.

“People … like to make the most of their limited vacation time.”