‘Salary advances’ by Susan Ball, Partner, RSM. and Joe Pickering, Associate Director, Employer Solutions, RSM

Salary advances are becoming more commonplace as the cost-of-living crisis bites. Susan Ball and Joe Pickering explain what they are and what factors an employer must consider.

Salary advance schemes are arrangements made between an employer and its employees, allowing those employees to access some of their earned salary before their normal pay day.

Third party salary advance schemes are a type of financial product. Using the services of a salary advance provider, an employer provides participating employees with access to part of their salary as it is earned, rather than paying their full net salary on the normal pay day. These arrangements are becoming increasingly popular as employers look to support their employees through the current cost-of-living crisis.

If an employer has signed up with a provider that offers such a service, its employees will be provided with access to an online app or platform where they can keep track of what they are earning. The employer decides what percentage of an employee’s salary can be made available to them as an advance, and the employee can see what amount is accessible to them.

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