Payroll On Demand: What’s It All About?
There’s no shying away from the financial challenges many working people and businesses are facing in the current economic climate.
The continued cost of living crisis is taking hold, with many feeling the squeeze as they struggle to pay their bills. Being paid once a month or even every other week simply isn’t enough for some at the moment.
With this in mind, could payroll on demand be the answer?
What Is Payroll On Demand?
Also known as an employer salary advancement scheme (ESAS), payroll on demand bypasses the traditional payroll process, giving employees early access to their salary.
The scheme is a game-changer for individuals who are grappling with rising costs and struggling to make ends meet between payday dates.
How Does Payroll On Demand Work?
Payroll on demand works by giving employees access to a maximum of 50% of their salary, if they pay a fee.
Typically, this is less riskier and more beneficial for struggling workers than a payday loan, as you’re not borrowing money or incurring interest.
What’s more, you don’t have to be a low-income worker to access this due to the various options available that are geared to various salary brackets.
What Does It Mean For Employers?
Opting to offer this scheme is a great opportunity to nurture employee financial wellbeing and genuinely support the people that work for you.
Although it may seem like paying for work that’s not yet been delivered, if employees access the scheme through an ESAS provider, they’ll be directly charged by them, costing you nothing.
Another option is to find a company that offers to split the fee payment between both the employer and employee.
Pros & Cons Of Payroll On Demand
As with any scheme there are advantages and disadvantages, so let’s take a deeper look at the bigger picture…
Pros
- More likely to retain employees.
- Employees will be able to do their job much more effectively if they’re not worrying as much about their finances.
- A safety net for employees so they can better forecast their money.
Cons
- Whilst fees are likely to be a lot less than the ones being stumped up for payday loans, there still might be a fee some feel isn’t worth paying to access the funds earlier.
- Tax is still applicable, so employees who forget to make any necessary deductions may be liable with HMRC further down the line.
- As with any payments, there is a risk of error.
Payroll Solutions With FastPay
Looking for better ways to pay your workforce? We’re here to help.
At FastPay, we regularly assist a number of clients with their payroll payments, offering bespoke solutions and Direct Credit services to best fit their business needs.
Start your journey with us today and contact our team online. Alternatively you can call us directly on 0161 7375290.