There are many benefits to using Early Pay. For starters, it allows employees to access their money sooner. This can help those needing to pay bills or make other financial commitments before their next paycheck.
Early Pay also can help avoid late fees and penalties associated with traditional payday loans.
Setting up Early Pay
Early Pay is automatically included in your Payroll Subscription and, by default, is turned on. Simply log into your QuickBooks Online Payroll account and navigate to the Benefits tab. If your employees are not active in QB Workforce, you will need to invite them to use this feature.
Who is Eligible for Early Pay?
Several factors are used to decide eligibility, including how long the employee has worked for you, their estimated hours, and other factors. Employees also must be on direct deposit to be eligible for Early Pay.
If approved, employees take an advance of up to 60% of their estimated upcoming paycheck, with a maximum of $700 per pay cycle, and have it directly deposited. The employer doesn’t have to know.
How Early Pay Works
Once approved, employees can log into their Workforce and see what funds are available for them to draw. Once they pay back the previously taken, they will be eligible to draw again if needed. They can do this confidentially through the app without asking for the employer’s approval.
One of the most incredible things about this feature is that QuickBooks performs all the backend work. Early pay has no impact on employers’ payroll or accounting, so there is no additional cost or risk for a company.
There is a small nominal fee of up to $3 max paid by the employee, but it is completely free to the employer. Additionally, no credit check is required, and the repayment happens on an upcoming payday.
Early pay is available to a limited group of employees, but QuickBooks Online Payroll expects a market launch and general availability in late 2022. This feature is located under the payroll benefits tab, and employees can access early pay via the workforce.
We all know life happens sometimes, so it would be a great way to help your employees without risking your business. Early Pay is worth considering.
Liz Scott is a multi-business entrepreneur working to bring together technology and accountants through her business, Liz Scott Consulting. A member of Intuit Trainer/Writer Network, she authored and taught Master level courses, including Advisory Guides and Consulting Tools for Accountants. In addition to Liz Scott Consulting, she also owns Accounting Lifeline, a firm to serve small businesses with their financial needs. Liz is a co-host of the “Appy Hour,” which helps other accountants learn about the different tools and apps for small business needs. Holding a high passion for real estate investment, she owns properties throughout Oklahoma.
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