Earned wage access software allows employees to access a portion of the money that they have earned prior to their next scheduled payday. Employees use earned wage access software to keep track of how much money is available to them and withdraw funds as needed. The wages that they take out in advance are then deducted from their next paycheck. Employers offer earned wage access as a financial wellness benefit for their employees. These platforms are often used by businesses that employ hourly workers.
For employees who need money urgently, the ability to quickly access wages that they have already earned can save them from being charged overdraft fees for low account balances or taking on debt through payday loans or credit card charges. Having the option to access earned wages can lead to greater financial stability for employees, which in turn can benefit businesses by reducing employee stress, improving productivity, and increasing retention.
Earned wage access is sometimes called on-demand pay, instant pay, or daily pay benefit, but these terms all refer to the same thing. Many earned wage access platforms also offer features that support employees’ overall financial wellness, such as budgeting tools and financial education materials. Earned wage access platforms typically integrate with payroll software or core HR softwareto facilitate sharing of employee data.
To qualify for inclusion in the Earned Wage Access category, a product must:
Give employees on-demand access to earned wages
Provide a portal or app for employees to manage earned wages
Integrate with payroll systems
Generate reports or dashboards that enable employers to track earned wage access usage
