System service payroll advance is a way that employees’ can get money transferred into their accounts via direct deposit (or check) in advance from their employer directly or through a third party.
Some employers offer an alternative to payday loans. But should you use it?
Most likely an employee would use it if they are scrambling to pay last minute expenses.
When I was working as a Controller of a country club, I had to give payroll advances to a few employees from time to time. It’s different than a payday loan because it was tied to our company’s payroll system and is written off on the next payday.
They aren’t really a huge risk because all parties know the next paycheck is coming which will cover the system payroll advance. In this article, we’ll go through the benefits of a payroll advance system in place for both the employer and employee — and what your options are if your company doesn’t offer one.
System Service Payroll Advance Offered By Employers
Many employers now offer payroll advances to their employees according to Wall Street Journal, “A growing number of companies are helping workers gain access to payroll advances and loans, reflecting concern over the impact money problems are having on productivity levels and worker retention.”
My previous company offered it because it helped our employees, and everyone faces emergencies and this is a much better option than a payday loan or an online installment loan and everyone benefits.
A happy employee and a company that has not lost any money essentially.
Thinking About Taking a Payroll Advance?
As an employee, there will be a lot of times where you need money today.
Whether your water pipe bursted or your roof is leaking and you need to get these fixed desperately, you have a few options when your bank account is low.
You can get a credit card advance or even a personal loan, but most online lenders take a few days and require a hefty application.
If your company doesn’t offer a system payroll advance, you may have luck with Zippyloan if you need money tomorrow.
What If Your Company Doesn’t Offer a Payroll Advance?
If you actually need money now, then you can opt for a personal loan. When you need money in a hurry ZippyLoan is where to go. You apply for a loan through the Zippy Loan site, if approved they send your loan application to one of many loan providers.
You review the loan details and e-sign if you like what you see. No risk in checking what offers you’ll get. You can borrow between $100 and $15,000 as soon as tomorrow. Loans service for up to 60 months.
ZippyLoan connects borrowers to lenders through their network of lenders. They’ll find you the lowest interest rate and is one of the best no credit check loan. You can visit ZippyLoan here.
- Borrow between $100 and $15,000 as soon as tomorrow
- No credit check
- Good option if you have bad credit
System Service Payroll Advance — Is It Difficult?
It’s not difficult for either employees or employer.
Companies like Walmart and Comcast recently have begun offering paycheck advances as a benefit to their employees.
Paycheck advances are designed as an affordable alternative to short-term loans, credit card cash advances and bank account overdrafts as we’ve already discussed.
If you are an employer who is consider implementing this into your payroll system, then it’s a wise idea to do so.
Or, you can even make use of an external System Service Payroll Advance third party solution to handle the entire process for your employee and your business cash flow.
Consider both options and decide what’s best for your company and employees.
Best Features of a Payroll Advance
So what exactly are the benefits of a payroll advance?
Here is a list of the best features of a payroll advance.
It Is Not A Payday Loan
Employees do not have to face hefty interest charges that they incur when they take out a payday loan.
They Are Needed
With many Americans living paycheck to paycheck – as much as 78% of U.S. workers, according to a 2017 CareerBuilder survey – a benefit like a payroll advance could help cover emergency expenses. Also, according to the 2019 Charles Schwab Modern Wealth Survey, only 38% have built up an emergency fund.
What Are The Potential Pitfalls With Payroll Advance?
There has to be some downsides right?
Especially if you have an employee who always want to get an advance on their paycheck.
While payroll advances can help people who have occasional emergencies, it can also be used chronically like payday loans.
So it’s important that the payroll advance system in place is tied to the employer and its payroll system.
Can You Use Payroll Advance Apps?
If your employer won’t offer a payroll advance, you can try payroll advance apps.
These free mobile applications available in the App Store and Google Play Store can help you get your paycheck early so you can enjoy cash now.
Chime is a financial technology company that provides faster access to your income. If you have a Chime account with direct deposit, your wages become available to you the same day they’re deposited by your employer. This gives you access to them up to two days earlier than if you were using another financial service.*
Chime is a bank account where you can transfer money, send and deposit checks, and offers bill payments online. You can also get spotted up to $200* at any time with its no-fee overdraft service called Chime SpotMe. The app will spot you up to $200 on debit card purchases and cash withdrawals with no overdraft fees. It’s a perfect way to get access up to $200, just for signing up.*
Simply sign up for Chime, and the free banking app will lend you cash for free, you just relax while it will spot you up to $200 any time. There’s no catch. This bank account is legit and only takes two minutes to sign up for an account.
*Chime SpotMe is an optional, no fee service that requires a single deposit of $200 or more in qualifying direct deposits to the Chime Checking Account each month. All qualifying members will be allowed to overdraw their account up to $20 on debit card purchases and cash withdrawals initially, but may be later eligible for a higher limit of up to $200 or more based on member’s Chime Account history, direct deposit frequency and amount, spending activity and other risk-based factors. Your limit will be displayed to you within the Chime mobile app. You will receive notice of any changes to your limit. Your limit may change at any time, at Chime’s discretion. Although there are no overdraft fees, there may be out-of-network or third party fees associated with ATM transactions. SpotMe won’t cover non-debit card transactions, including ACH transfers, Pay Anyone transfers, or Chime Checkbook transactions. See Terms and Condition.
*Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date.
Related: Current vs Chime: Which is Better for You?
Empower is an app designed to be a one-stop shop for today’s generation – no matter what the future throws at you, they’ll help guide you. By downloading the app and using it, people can get up to $250 in cash advances when needed, as well as saving for their future.
They’ll provide a cash advance on your next paycheck up to $250 directly to your account. There’s no application or credit check required and there are never any hidden fees, interest rates or credit risk – just pay them back automatically when you receive another direct deposit from your payroll.
You can count on them to have your back and get a cash advance up to $250 directly to your account. No applications, no interest or late fees, no credit checks or credit risk. You just pay them back automatically when you receive your next direct deposit. There’s no catch. It’s that simple.
MoneyLion is banking that gives you more, a lot more so you can get paid today. You can get spotted $250 at any time with no interest with Instacash. This gets you 0% APR cash advances up to $250 to help you cover essentials and surprises, just apply and link your checking account (no monthly fee). Plus, you can get your paycheck up to two days early with RoarMoney – plus easy ways to borrow, save, invest, and earn. All in one app.
MoneyLion is banking that gives you more, a lot more so you can get paid today. You can get spotted $250 at any time with no interest with Instacash. This gets you 0% APR cash advances up to $250 to help you cover essentials and surprises, just apply and link your checking account (no monthly fee).
You work today, get paid today. Earnin is a completely new way of handling your money while on the job. Get paid today with Earnin’s revolutionary service that changes how the American financial system functions by paying you now and giving you up to $100 per day – without interest or any fees. Get your next payroll check today.
Earnin is an app that lets people borrow money against their paychecks. Earnin says it doesn’t charge fees or interest either. Instead, the company asks for tips. But you’ll have to meet eligibility requirements and sacrifice some privacy to use the app.
Brigit can help those who want to get a payroll advance of up to $250 today. It’s a free app available on both iOS and Android which makes it easy for you to save money and spend smarter with no credit check or interest.
The Brigit app offers paycheck advances up to $250, plus credit-monitoring features. You’ll pay a monthly fee for access to your cash.
Branch helps working Americans manage their everyday finances. With its on-demand app, we are able to offer customers a convenient way to meet their needs whenever they arise. This app allows employees to receive their pay (up to $500 per paycheck), manage their finances, and spend money anywhere – all from a smartphone.
The Dave app has streamlined the process of banking with features designed to also make your financial life easier. With instant mobile deposits, credit building programs, and up to $100 fast advances without a service charge – all available in one app.
With DailyPay, employees can work and get a payroll advance today. They shouldn’t have to wait through the day for a paycheck when they know it’s coming in their bank account. But since employers must sign up to offer DailyPay and get access to the right payroll service, not everyone can take advantage of this benefit.
In order to use PayActiv, you need an employer who offers it as a benefit. But this is one app where you can get paid and withdraw up to 50% of what you earn (or $500) today even if your paycheck doesn’t hit your account until tomorrow.
FlexWage is an employee-sponsored platform where you can get paid today if your employer offers it. There are no fees for the employee to access their paycheck via a reloadable card tied to their earned wages. If your employer does offer this, the fees will be determined by the employer.
The Final Word
To chalk it up, a system service payroll advance is a software or a solution offered by a third party system that helps employers and employees bridge the gap during times of needs where money is needed.
It’s similar to a payday loan but does not burden the employee with drastic interest rates and fees and is tied to the employers payroll system.
By having a system payroll advance in place, it can lead to workers with less stress and more motivation at work. It doesn’t cost the employer any more money and every employer would benefit from having a payroll advance system in place.