Payroll deferral doesn’t appear to give meaningful relief to low-income Americans - but payroll flexibility can fill that gap and then some. And when we encourage financial freedom and planning, our employees are less stressed at work and more productive. Giving employees access to earned pay when they need it isn’t just a psychological benefit: From reduced reliance on overdrafts and late fees to avoiding interest on payday loans, the average person accessing on-demand pay saves over $100 each month or about $1,200 each year.Įnabling employees to receive earnings on a more convenient schedule empowers them to start saving. New apps allow employers to pay employees whenever they want - outside of the traditionally choreographed standard payroll process and without incurring major costs. Technology that gives employers and employees pay flexibility is now available. Collectively, these two industries suck tens of billions of dollars each year from low-income Americans in the form of predatory interests and fees. Before today, the payday loan industry and overdraft industry existed largely to accommodate poorly aligned due dates. Of course, life doesn’t wait for the 15th or 30th days of each month payroll calendars don’t cleanly line up with bill due dates for the average worker. Two out of three workers continue to be paid just once or twice each month due to the cost and overhead employers incur running payroll. As we continue arguing over the mechanics of payroll tax collection, workers face ongoing challenges in pay structure and schedule. Faced with the potential need to chase down employees in 2021 to “pay back” money not collected in Q4 2020, many employers have decided against the hassle.įortunately, there are more meaningful ways for employers to impact employee well-being and bank accounts. This is a free service offered by the Internal Revenue Service and you can get your EIN immediately. You may apply for an EIN in various ways, and now you may apply online. In addition to burdening employees, employers similarly see drawbacks to a payroll tax deferral. An Employer Identification Number (EIN) is also known as a Federal Tax Identification Number, and is used to identify a business entity. For most employees, implementing reduced withholding just isn’t worth it.
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