How does Instant Pay work?

Do you hate having to wait weeks to receive your paycheque? Yeah, we do, too.

Having to wait for a pre-set payday in order to receive your hard-earned money can be a big problem for many people who need access to their wages sooner rather than later. It’s also one of the reasons so many people end up stuck in a vicious cycle of expensive payday loans and high-interest cash advances that they just can’t escape.

But, what if there was a solution to your payday woes? What if you could receive at least some of your paycheque as you earn it?

Enter: Instant Pay.

With Instant Pay, you can get up to 50% of your earned pay deposited in your KOHO account every single work day. That means no more waiting two weeks for a paycheque and more flexibility in how you manage your money. Oh, and Instant Pay is free for employers to implement and employees to use, so it’s a win-win for everyone.

Now if you’re thinking Instant Pay sounds too good to be true, we’re here to tell you that it’s as amazing as it sounds. To help you understand the benefits and inner workings of this great payroll feature, we’ve put together this detailed guide to how instant pay works and all of its amazing benefits.

What is Instant Pay?

Instant Pay is a payroll benefit that employers can use to help their employees get on-demand access to some of their hard-earned money sooner rather than later. In other words, Instant Pay makes the traditional model of paycheques and pay periods a thing of the past.

Instead of having to wait two weeks or a month to receive your wages, Instant Pay lets employees receive up to 50% of their daily pay each day of the week. This gives employees more flexibility over their money and makes it easier for them to stay on top of bills and other expenses that often come due in between paycheques.

We can think of Instant Pay as a form of earned wage access (EWA), which is a program or service that helps employees get access to at least a portion of their pay before their official payday. EWA programs and services are particularly important for the many Canadians who live paycheque-to-paycheque, though they can benefit anyone, regardless of their financial situation.

With these programs, people can get the money they need on a regular basis instead of having to wait until their next payday. This can help people avoid the need to take out predatory payday loans and cash advances that often charge super-high interest rates in order to pay bills or unexpected expenses.

Instead of resorting to these services, people with access to EWA programs like Instant Pay can use the money they’ve already earned at work to pay for their living expenses. What could be better?

Benefits of Instant Pay

Now that you know a little more about what Instant Pay is, you’re probably thinking it’s pretty fantastic, especially compared to the old-fashioned model of waiting weeks for your paycheque.

We here at KOHO agree. Instant Pay, like other EWA programs, offers a whole host of excellent benefits for employees and employers alike.

For employees, some of the biggest benefits of KOHO’s Instant Pay feature include:

• Faster Access To Your Money – When you use Instant Pay, you’re simply getting the money you’ve already worked for quicker than ever before. In our fast-paced society, there’s no reason to have to wait for your wages, and with Instant Pay, you never have to hold out for payday to pay bills ever again.

• No Fees – Most employees who use KOHO’s Instant Pay feature never have to pay any fees for the service, which isn’t exactly the case at some other fintech companies that offer similar platforms. We like to be transparent here at KOHO, though, so we’ll talk about one fee associated with Instant Pay for employees later on in this article (but good news: you can easily avoid this fee by withdrawing your wages to your KOHO account).

• No Interest Charges – KOHO also never charges interest on the money you get through Instant Pay. That’s because those funds aren’t loaned to you in exchange for future repayment like with a payday loan—they’re your wages that you’ve already worked for.

Thought Instant Pay was just for employees? Think again! Instant Pay has a bunch of great advantages for employers, such as:

• Improved Employee Loyalty – When employees feel settled and confident in their financial lives, they have more mental space for work. This can help boost employee performance at the office and increase loyalty to your company.

• Attract Future Talent – The job market is super competitive these days and companies need to offer all the benefits they can to attract top talent. Adding Instant Pay from KOHO to your list of employee benefits can help you bring in new team members that can propel your company to new heights.

• Convenient Payroll Processing – If you add KOHO Instant Pay to your company’s list of employee benefits, you don’t have to completely reinvent your payroll process. Instant Pay is designed to integrate seamlessly with your existing systems so you can spend less time dealing with paperwork and more time growing your business.

Downsides to Instant Pay

If you couldn’t tell, we believe Instant Pay is pretty darn awesome for employees and employers alike. But we strive for transparency and honesty here at KOHO and we never want you to think that we’re glossing over any fine print.

There are a few potential drawbacks to earned wage access (EWA) programs and services, including:

• Legal & Logistical Limitations – EWA programs are fairly new and some regulatory bodies have made it somewhat difficult for companies to implement these sorts of services for their employees. Ultimately, each company has to do their own research on local labour laws to ensure that its EWA programs comply with government regulations.

• Fees & Interest Charges – Some EWA programs charge lots of hidden fees to both employers and employees. The good news is that KOHO’s Instant Pay doesn’t have these hidden fees, so both companies and their talent can make the most of their money.

• Privacy Concerns – Implementing EWA programs requires that companies and employees provide sensitive financial information to third parties, which could be a privacy concern. Thankfully, KOHO partners with reputable and federally-regulated financial institutions that work to safeguard everyone’s sensitive financial and personal information at all times.

As you can see, there are some downsides to these programs that both employees and employers should seriously consider before implementing EWA services. But it is possible to get all the benefits of EWA without many of these drawbacks by using a no-fee program like KOHO’s Instant Pay.

How Does Instant Pay Work?

Instant Pay certainly sounds awesome... but how does it work? And, most importantly, what’s the catch?

With Instant Pay, employers can offer their employees the opportunity to get a portion of their wages deposited into their KOHO account at the end of every workday. The amount that an employee can receive in earned wages each day varies on a number of factors, but it can be up to 50%.

These funds will get automatically transferred to an employee’s KOHO account for them to save or spend as needed. An employee will then receive the rest of their earned wages like normal on their regular payday. It’s as simple as that!

The best part about Instant Pay is that it’s free for employers to implement and for employees to use. That means more money for companies to invest in their business and more money for employees to spend on what matters most to them.

The catch? Well, there is none.

In the interest of full transparency, we do want to point out that Instant Pay is free for employees to use if you withdraw your wages to your KOHO account. However, if you transfer your pay to a different bank account other than your KOHO account, you’ll pay a $3.50 fee per transaction.

But you can avoid these fees by withdrawing your pay to your KOHO card where you can save it or spend it as needed. If you do so, you can use Instant Pay fee-free, get earlier access to your money, and take advantage of all the incredible features that KOHO already offers. Cha-ching!

I want to use Instant Pay. How do I get started?

Love the idea of Instant Pay but bummed that your employer doesn’t currently offer it? Have no fear—you can bring the wonders of EWA to your workplace.

If you’re an employee, you can fill out a form with your company’s information and KOHO will take care of the rest. Someone from the KOHO team will contact your employer and talk to them about the benefits of offering Instant Pay.

For the employers among us, the ball is in your court. Fill out the form to schedule a quick chat with a KOHO team member to learn more about Instant Pay and what it can do for your company.

Instant Pay: the start of the paycheque revolution

KOHO’s Instant Pay feature is the latest innovation in the paycheque revolution that seeks to move companies away from the inflexibility of monthly payday schedules and protect employees from predatory payday loans.

Instant Pay is a simple and efficient tool that companies can provide for their employees to promote earned wage access. It can also make life easier for the many Canadians who live paycheque to paycheque and it can help you take control of your finances. What’s not to love?