Earned Wage Access

Summary Definition: A financial service that allows employees to access earned wages before their next scheduled payday.

What is Earned Wage Access?

Earned wage access is a financial service where employees can choose to access their accrued wages before their next scheduled payday. Also called on-demand pay, wages can be disbursed in multiple ways, including a mobile app, direct deposit, or a payroll card.

While valuable for employees facing unexpected expenses or debts, there is a risk of employees withdrawing too much too early, potentially leaving them unable to cover necessary expenses when their regular payday arrives.

Key Takeaways

  • Earned wage access allows workers to access their earned and unpaid wages before their next payday.
  • The wages can take different forms, such as direct deposits or money apps.
  • The service gives financial flexibility to employees who have unexpected expenses or lingering debt.

How Does Earned Wage Access Work?

Employers can offer earned wage access services by partnering with a third-party and integrating that service with their existing payroll software. Employees can then use the third-party’s app or a website to request their earned wages whenever they need. The service will disburse the funds to the employee and deduct the amount from the employee’s next paycheck.

Transaction Fees

Instead of accruing interest for repayment like a personal loan, wage requests can have fees applied to the amount in the request. Earned wage access providers can use a variety of fee types or systems, such as charging a percentage of the total amount accessed or simply adding a flat fee for each transaction.


To avoid accidental tax penalties or liabilities, earned wage access providers can choose to limit the amount a request can access after calculating approximately how much net pay the employee will have based on their current elections and deductions. This guarantees the employee won’t accidentally request too much of their wages to cover the payroll taxes applied on their next payday.

Earned Wage Access Benefits

Offering access to earned wages provides benefits for both employers and employees:

  • Offering earned wage access can be a valuable recruiting tool for attracting and keeping talented workers.
  • Employees won’t have as much financial stress knowing they can access their wages more quickly if needed.
  • Improved office morale if employees recognize and appreciate the extra financial support the organization is offering.
  • Employees can improve financial wellness through better income management for emergencies or unexpected expenses.

Any Day Can Be Pay Day

Unexpected expenses happen. And they don’t wait for pay day. When your employees need an immediate cash flow option, our On Demand Payment gives them flexible access to their earned wages without interrupting your payroll process. Your workforce can do this directly from our mobile app. That means there’s no added paperwork for you – and it helps employees satisfied in a competitive market.

On Demand Payment