If you’ve ever wanted your paycheck earlier for an unexpected expense, you’re not alone. A new survey shows overwhelming support for on-demand pay.
About 6% of employees are currently paid on demand, according to research from The Workforce Institute at Kronos Inc., an organization that focuses and conducts research on workplace issues. That 6% can get access to earned wages before a typical payday. The institute conducted a survey of 1,180 employees to see how having immediate access might impact their lives.
The study found that 72% of workers have wanted access to the money they’ve earned ahead of payday. And 61% believe they shouldn’t have to wait until payday. Broken down by industry:
- 65% of those who work in retail believe they shouldn’t have to wait for payday
- 61% of healthcare workers feel that way
- 54% of manufacturing and construction employees state the same
Slightly more than half of workers (51%) believe early access to their paychecks would be a more valuable benefit than extra paid time off. Respondents were even willing to pay money to get early access to their wages, with 75% of hourly workers and 71% of salary workers saying they would consider paying up to $5 for access to $50 of their paycheck before payday. And 8% said they would consider paying $50 to access $50 of their paycheck before payday.
Those who earn less are more likely to want early access to their wages. In fact, 87% of workers with a household income of less than $50,000 a year wished for early access, compared with 67% of employees who have a household income of more than $50,000 a year. Also, 50% of workers ages 18 to 34 said they would prefer to be paid on demand rather than having a scheduled payday, as would 51% of workers ages 35 to 44. Renters were more likely to prefer on-demand pay over a scheduled payday than homeowners (51% versus 39%).
So why do workers want early access to their paychecks?
- 66% said they wanted it so they could cover their bills
- 32% said they wanted access to the money for emergency expenses such as a car repair
- 19% said they wanted it for unplanned medical care
- 6% said they wanted it for student loan repayments
Some workers desired their money for wants rather than needs. In fact, 11% said they wanted access to their money so they could enjoy a night out, while 10% said they wanted it so they could get a jump on their holiday shopping.
Having access to your paycheck early can come in handy when you’re hit with unexpected expenses. But a better way to prepare for financial emergencies is to budget your money so you don’t overspend and boost your emergency fund through increased savings. Always try to avoid paying for access to your own money since it sets you back financially in the long run.