Why should employers consider Instant Pay?

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Why should employers consider Instant Pay?

Rounding it up

  • Employers can give their employees a valuable tool by offering Instant Pay as a payroll benefit.

  • Instant Pay plugs right into existing payroll systems, so it’s easy to implement and offer to your hard-working employees.

  • Many companies find that their employees are both more loyal and more productive when they’re given access to better financial tools.

  • Employers can also support employees’ financial wellness by promoting Instant Pay and providing other fringe benefits.

7 min read

Dan Bucherer
#Instant pay#payroll#payday#earned wage access#paycheque#job market#hiring

There aren’t too many things as important to a Canadian’s wellbeing as their job. Sure, family, friends, and hobbies often take precedence over work, but at the end of the day, a person’s job is the way that they pay for all of their bills.

Unfortunately, some employers don’t know or truly appreciate the role that they play in their employees' lives. Employees place faith in their employers to keep the cheques flowing and employers count on their workers to keep their productivity up.

As a result, employers should consider any and all tools at their disposal to help keep this relationship strong. That’s why employers should consider adding convenient tools and programs like Instant Pay to their list of employee benefits.

Check out our article below for a few reasons why Instant Pay is a great feature that all employers should offer.

KOHO Signup Link

Stand out from the crowd with Instant Pay

Running a business is tough stuff. In addition to doing everything you need to do to keep your company chugging along, from keeping the coffee machine stocked to paying corporate taxes, business owners also need to find ways to keep their employees happy and productive.

As a result, it’s no surprise that many companies aren’t out there looking for new things to implement at their organization since many of these new programs take a lot of effort to run and maintain.

Instant Pay from KOHO, however, isn’t one of those things. It’s an easy-to-implement payroll benefit that you can offer to employees that doesn’t require any extra leg work on your end.

How, you might ask? Let’s walk through exactly how Instant Pay works for both employers and employees to find out.

How does Instant Pay work for employees?

Instant Pay is a type of earned wage access (EWA) program that lets employees withdraw up to 50% of their earned wages at the end of every workday. It’s designed to plug into the payroll and HR process that you already use so your employees can start using it right away.

But it’s important to keep in mind that Instant Pay is not a loan. The money that employees receive is pulled from funds they’ve already earned for their work.

The good news is that if your employees have a KOHO account, their early pay funds transfer is both instant and free. If they don’t, it will cost them a flat fee of $3.50 to transfer their funds, and their transaction may take a few business days to clear.

How does Instant Pay work for employers?

Wondering how Instant Pay works on the employer side of things? Here’s a quick step-by-step guide to what this program entails for businesses.

Step one: give KOHO a call

First things first, give us a call to kick things off! We want to hear about your business and how we can support your employees.

Instant Pay is a stellar tool and the team at KOHO is excited to tell you all about it. Plus, it’s free for you to implement and free to use for employees who have a KOHO account.

Step two: set up Instant Pay

Once we’ve decided to work together to increase employee morale and productivity at your business, a dedicated team of KOHO specialists will work directly with your HR, accounting, and payroll departments to get Instant Pay plugged into your system.

The beauty of all this is that your existing processes won’t change once you add Instant Pay to the mix. KOHO takes care of all of the particulars and makes implementation of the system quick and easy.

Step three: educate your employees!

We here at KOHO have plenty of information available to help you explain Instant Pay, how it works, and what things employees should consider when using it.

It’s important that businesses explain the value proposition of accessible cash to their employees and the fees involved with Instant Pay so that everyone knows what they’re signing up for.

Step four: your employees can make the most of Instant Pay

If your employees have a KOHO account, they can head to the app and access their Instant Pay funds at a moment’s notice. All they have to do is log into their account, select an amount to withdraw from their paycheque (up to 50% of their earned wages), and have the money instantly deposited in their account.

Pros and cons of Instant Pay for employees

As is the case with all financial products, there are a few things your employees need to think about before they sign up for Instant Pay. Here are some of the pros and cons of EWA programs like Instant Pay to keep in mind as you encourage your employees to use the service.

Pros

Some of the many advantages of using Instant Pay as an employee include:

  • No interest – Of crucial importance to Instant Pay from KOHO is its interest-free nature. There’s no interest for Instant Pay because employees aren’t taking a loan from either you or KOHO. Instead, they’re accessing funds they’ve already earned. This can help your employees save on all sorts of fees from loan products, including those that may be more predatory, like payday loans.

  • Quick – Instant Pay is just that: instant. That means employees with KOHO accounts can get access to their cash instantly. Need to find money to pay for groceries while waiting in the checkout line? You can simply log in to the app, withdraw your funds from Instant Pay, and have money waiting for you in your account before you even get to the clerk.

  • KOHO Benefits – If your employees are KOHO account holders, they get access to all of the other amazing features that come with KOHO in addition to Instant Pay. This includes cashback on their daily spending, nifty budgeting tools, and competitive interest rates.

KOHO Signup Link

Cons

We’re all about transparency here at KOHO, so we want everyone to know about any potential downsides to our products. While we think Instant Pay is incredible, some possible disadvantages to it for employees include:

  • Smaller paycheques – If employees are withdrawing money from their cheques during the workweek, it stands to reason that there will be less available in their paycheques on their actual payday. It’s crucial that employees understand this so they’re not surprised when their direct deposit is for a smaller amount than they expected.

  • Potential fees – If your employees don’t have KOHO accounts, they could face a flat fee of $3.50 per withdrawal. It makes some sense to tell employees this early so they can open a KOHO account and save on fees with their Instant Pay transactions.

  • Taxes & deductions – Your employees will still face the normal taxes and deductions from their cheques on payday even when they use Instant Pay. This means that they should be prepared to have even less money on payday if they’re regularly withdrawing from their paycheque early. For example, if your employee is supposed to be paid $1,000 on payday but they deducted $500 through Instant Pay, they should expect $500—less any taxes and other distributions like retirement contributions—on payday.

Pros and cons of Instant Pay for employers

So far, we’ve discussed Instant Pay’s pros and cons for employees. But what about for employers? Here’s what you need to know.

Pros

There are many potential benefits to Instant Pay for employers. These include:

  • Easier recruitment – Instant Pay allows you to differentiate yourself from other employers in a competitive talent market. It can be difficult to hire and recruit top talent, so employers need to do anything they can to make their jobs more enticing. Instant Pay can help you do just that.

  • Simple way to support your employees – There are no ifs, ands, or buts about it: Instant Pay is a downright amazing tool to provide for your employees. After all, you want your employees to be financially successful, and Instant Pay can help them better manage their money.

  • Higher employee productivity & loyalty – Employees who are more financially secure are both more productive and have greater loyalty to their employers. This translates to higher profits in the long term. Instant Pay provides the financial security employees need, so it can help your business grow over time.

Cons

In reality, there aren’t many downsides to Instant Pay for employers.

But it is possible that an employee may not fully understand Instant Pay and they might be upset when their paycheque is smaller than they expected on payday.

In these situations, education is the key. Thankfully, KOHO is prepared to help onboard your employees. Our expert team can explain the ins and outs of the program to the hard workers at your company so they know what to expect when they use Instant Pay.

Instant Pay: a must-have for any competitive employer

Employers should think of Instant Pay as one of the many tools that they can offer to employees to help them manage their money and get to a state of financial wellness. It’s a simple and easy program to implement as an employer and it can do wonders for the talent at your company by making it easier for hard-working Canadians to get access to the money they’ve already earned.

Interested in bringing Instant Pay to your business? Reach out to the team at KOHO to schedule a demo so you can see how this incredible payroll benefit works in real-time.

Dan Bucherer

Dan is a runner and writer living in the Washington, D.C. area, where he currently works for a financial services trade association as the Communications Director.

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