With everyone from Home Instead and HC One, to the NHS and Bupa, now offering On-Demand Pay, it’s time to get up to speed.
What is On-Demand Pay?
On-Demand Pay gives employees debt-free access to a portion of their earned income before payday. This helps them meet unexpected expenses without impacting their employer’s cashflow or payroll.
How does On-Demand Pay work?
Typically, the On-Demand Pay provider funds the employee’s early access to their earned income and reclaims it from the employer on payday. This is done in two ways:
- Most On-Demand Pay providers send a file detailing usage and require the payroll team to deduct and transfer any income taken early manually.
- Level automatically pays themselves back post-payroll but before the money reaches employees’ bank accounts. This splitting technology allows the employer to run payroll as normal.
Benefits of On-Demand Pay
Benefits of On-Demand Pay for Employees:
- Reduce Debt Use: The flat fee charged for On-Demand Pay is usually only a couple of pounds, meaning it is 99% cheaper than the interest typically charged on short-term credit. This gives employees a debt-free alternative for dealing with unexpected expenses.
- Accessible for All: Unlike most financial products, On-Demand Pay is available for all staff and everyone is charged the same fee.
- More Control: Employees can choose a pay cycle that works for them. Many find it easier to budget weekly rather than monthly.
- Smooth Out Income: With modern direct debts and spending spread across the month, On-Demand Pay brings income in line with outgoings to avoid peaks and troughs in people’s personal cashflow.
Benefits of On-Demand Pay for Employers:
- Recruitment: Offering an innovative benefit like On-Demand Pay can help attract staff and, with tens of thousands of live roles offering it today, is increasingly expected by job seekers.
- Retention: By supporting employers’ wellbeing, many studies have shown a reduction in staff turnover after On-Demand Pay has been introduced.
- Shift-Filling: By rewarding overtime more instantly, shifts are much easier to fill despite the hourly rate remaining unchanged.
- Absenteeism: Increasing financial health decreases stress, reducing the time employees take off sick.
What UK employers already offer On-Demand Pay?
In the UK, 14% of all employers already offered On-Demand Pay as a benefit. This includes some of the nation’s biggest employers, including Tesco, Asda, Capita, Greene King, many NHS trusts, multiple local councils, Bupa, Home Instead and Next.
Level On-Demand Pay
Level is one of the UK’s leading providers of On-Demand Pay, and one of only two with the technology to fully automate it. They already provide the service to employees at Home Instead, Agincare and multiple NHS trusts.
If you are considering offering On-Demand Pay as a benefit to your staff, you can get in touch with one of their experts who can answer any questions you might have.