Workers access wages early to pay for basic needs and seek work perks to save cash

With employers also feeling the pressure of inflation, many are offering staff non-financial benefits to help save cash. See what they are.

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 earn it rather than wait until their usual payday, has skyrocketed this year as costs of living leave many families unable to afford even the basics.

“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.

Paytime CEO Steven Furman. Picture: Supplied

“These are people that may have had a flat tyre 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 unexpected costs).”

VICIOUS CYCLE

Furman says earned 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 already owned by the worker and is just being 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’.”

As savings are getting more and more depleted, many people no longer have the savings to pay for unexpected costs. Picture: iStock

Employers must sign up to the Paytime model to give their workers early access to up to 50 per cent of their earned salary. Each withdrawal incurs a small fee (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 does depend on each 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 power bill.

“It’s really helped me,” he says.

WORK PERKS

With employers also battling inflation, and unable to hand out the big pay rises of the past few years, 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 what’s offered, the perks could save workers more than $2000 per year, says Ross McDonald, Australia country manager at benefits and 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.”

Sheryl Perez does a treatment on Christianna Mastrovasili. Sheryl offers her employees and their close family free treatments – and for relatives heavily discounted treatments – so they can still feel and look good during the cost of living crisis.

Beauty clinic owner Sheryl Perez offers free treatments to her employees and their close family, as well as heavy discounts for extended family. Some of 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 and they can spend what they have saved on their family,” says Perez, owner of Beauty Hub Sydney.

DESIRE FOR TRAVEL

Research from Corporate Traveller reveals travel is the most desirable non-monetary benefit for employees, ahead of other perks that are arguably more relevant to household budgets, such as extra paid leave days, help to meet work commute costs and company-paid meals and snacks.

Help to meet work commute costs are among the most desirable non-monetary benefits for employees. Picture: iStock

“For most people, travel isn’t really discretionary – it’s a necessity,” says Corporate Traveller global managing director Tom Walley.

“People work hard and like to make the most of their limited vacation time. They might change what they do on holiday but they don’t typically put the holiday on hold for an extended period.”

STRUGGLING TO PAYDAY

• 81 per cent of Aussie workers want the opportunity to access their earned salary before payday

• 83 per cent say their mental wellbeing would improve if they could access earned pay when it suits them

• 73 per cent would feel more in control of their finances if they could access earned pay sooner

• 68 per cent say they would be more productive at work if allowed to access their earned pay when they need it.

Source: Paytime

Originally published as Workers access wages early to pay for basic needs and seek work perks to save cash