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According to a Harris Poll conducted in 2021, an astounding 83% of U.S. workers wanted to be paid their earned wages at the end of each work day, rather than be forced to wait the normal two to four weeks.

Other findings from the poll revealed that 78% of employees believed that better earned-wage access (EWA) would boost their loyalty to an employer. Another 81% said they would be more likely to take a job with an employer that offered on-demand wages.

Clearly, there is a lot of interest among workers hoping to change how and when they are paid.

On-demand pay

A report by EY on the impact of on-demand pay cycles calculated that about $1 trillion worth of wages is generated each day in around 35 developed countries, including Australia and New Zealand. That’s an enormous amount of money which is effectively off-limits to workers for the bulk of each month.

The report also said that the goal of companies that had already adopted on-demand pay was to help get funds moving more rapidly into the pockets of employees, especially since 70% of workers often said they experience financial hardship during the pay cycle.

The EY report also pointed out that nearly 75% of workers suffering financial difficulties also reported significant drops in their health and wellbeing, which can lead to reduced performance, absenteeism, and increased employee turnover (about 20% of employee turnover is linked to financial stress).

Although these stats focused on the U.S., they also apply to Australia and New Zealand. After all, one of the more common watercooler conversations involves jokes about how great it would be if staff were paid every day. And who hasn’t heard their colleagues complaining about the consequences of spending a good chunk of their pay the weekend just after pay day.

An end to living from pay day to pay day

Indeed, poor financial management is the normal situation for most people. Even before the COVID-19 pandemic, 33% of Kiwis were living paycheque-to-paycheque while only 20% were able to cover their living expenses for just one week or less if they lost their job.

On-demand pay aims to solve this issue by allowing employees to tap into money they have already earned. The system isn’t creating pay day loans and it’s not a salary advance either, since employees can only access the wages they have earned so far. Industries such as hospitality, healthcare and some in the ‘gig economy’ are already using EWA payment systems to great effect.

Financial flexibility for employees

The origins of the two-week pay cycle are murky at best, but for most companies the choice to structure their payroll in this way is largely down to form over function: sometimes it’s easier to generate payroll monthly, sometimes it’s easier to do it every two weeks. It really depends on the company.

The larger a company gets, the more employees it will hire and the more time it takes to process payroll. That’s why 12 pay periods per year is often the most efficient cycle for larger companies. It would simply cost too much to do it more regularly.

By offering employees more financial flexibility, they can better meet their financial goals, pay their bills on time, or add to a retirement fund. Their stress levels should drop too since they will have a more reliable financial safety net in place should they need it.

At a macro level, if workers can access their wages more regularly during the month, that could positively impact how economies function.

Macroeconomic benefits

Home improvement stores and supermarkets regularly report seeing a large spike in sales around the first and fifteenth days of the month. So, they know to stock their shelves and showrooms to prepare for the influx of sales after pay day.

But if wages were distributed more evenly across the month, the logistics of retail, fast-moving consumer goods and even entertainment and hospitality venues would be able to operate more efficient procurement plans, which may have the added effect of bringing down the cost of goods.

With the introduction of financial technology (fintech), Big Data analysis and digital wallets, it’s now easier than ever for even large companies to use on-demand payroll systems. And based on the experience of COVID-19, payroll systems will likely change faster than most of us expect.

Payroll outsourcing providers can help

Payroll outsourcing services can help encourage the trend towards disrupting the monthly or fortnightly pay cycle. Providers have already automated many elements to make payroll easier, but there’s still a lot of low-hanging fruit for payroll companies to offer EWA pay cycles.

For example, it would make a lot of sense if an employee could log into their self-service payroll portal and request access to earnings before the next pay day, in the same way they access payslips or apply for leave.

Another solution may be to offer employees a hybrid option to give them the choice of using a daily or a monthly pay cycle. As the Harris Poll showed, workers are willing to walk away from a company that doesn’t provide them with flexible pay options.

Whether on-demand pay is rolled out quickly, or if companies dawdle on the trend, will depend on several factors, such as the local regulatory environment, if an employer sees it as beneficial and, ultimately, if employees prefer it.

The stats suggest employees are begging for companies to offer a faster pay cycle.



For over thirty years, Affinity has been a trusted partner for mid-market and enterprise businesses in Australia and New Zealand, empowering them to transform their payroll operations. With a focus on turning payroll from a cost into an asset, we have established ourselves as industry leaders in delivering innovative cloud-based payroll software and exceptional payroll services.