Earned wage access = loan

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Many people think that if an employee collects a portion of their paycheck before the payday, it is a loan. This is a mistake. A loan usually comes with processing fees, interest, late fees, and in some cases, insurance fees. Earned wage access differs from expensive loans in that it does not come with any interest or late repayment penalties. The employee receives a portion of the wages to which he or she is already entitled, without interest or hidden fees. No more debt, just more flexibility.

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A whole paycheck in advance and no money at the end of the month

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Companies often worry that employees will not manage their money wisely and will withdraw all available funds before the payday. But through Advanto, they can never withdraw their entire paycheck - only part of it. On average, one user withdraws less than CZK 8,000 per month - not even half the minimum wage.

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In addition, the data shows that people use Payout responsibly at any time, mostly to cover unexpected expenses or routine purchases when prices are skyrocketing and payday is still a long way off. This helps people manage better and avoid expensive loans or late fees. "This social benefit actively trains people in financial literacy and reduces the risks associated with unnecessary debt that can result in a debt spiral, personal bankruptcy or falling into a debt trap," says HR Director Petra Slabá from OREA Hotels & Resorts.

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There's a lot of paperwork involved with anytime payouts

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Many companies, and especially their accounting departments, think that the introduction of Pay Anytime means more work for accountants. In reality, the whole process is automated and requires no additional administration. "The service requires no additional administrative work and does not interfere with our cash flow," comments the HR team at Vitesco Technologies. The only action required on the part of the company is to download the spreadsheet of the selections made and import it into the payroll system if necessary. Everything else is done automatically without the need for intervention. 

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Benefit is only for low-paid employees

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Flexible access to pay is for everyone and is used by people across all pay grades. It enables better financial planning regardless of income group. Even highly skilled workers or managers sometimes face unexpected expenses and appreciate not having to reach for a credit card or personal reserve. "We think the privacy that the app provides and the fact that the whole process is online also play an important role," comments Eva Kyselová, HR Director at Lagardère Travel Retail, on the benefit.

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Earned wage access is not a loan, does not increase the administrative burden, and is not just for low-wage workers. Instead, it brings flexibility, financial security and increased employee satisfaction. If you are considering implementing this benefit, look at the actual benefits and experiences of companies where this benefit is already in place, such as Notino, Adler Pelzer or ORLEN Unipetrol.

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Want to know more? Contact us to find out how Earned wage access can help you.