Helpful Hint
This guide will show you how to process an InstaPay deduction in your payroll software. This must be done in your payroll software and cannot be done in the Swag app. See below for step-by-step instructions on how to do this.
How it works
InstaPay is an Earned Wage Access (EWA) product that revolutionises the way users get paid. This allows users to access their money as they earn it. InstaPay is available to employees of an organisation that uses a compatible Payroll and HRIS connection, and is accessed by employees via the Swag app only.
There is no additional effort required to process an InstaPay deduction, and you will complete your pay run as normal. The payroll platform will pay your payroll software the withdrawn InstaPay amount, and this will show as a line item in the downloaded ABA file.
When an employee requests an InstaPay payment, these transactions will appear in the relevant pay run as a post-tax deduction. Your payroll software bases InstaPay availability on approved timesheets, or a pro-rated daily amount (for each work day) for salaried employees. To read further information on the employee facing side of the InstaPay feature, refer to the following article.
Important
InstaPay is not available on the employees' paid date, as shown by your generated pay run.
What you need to do
There are three steps that an administrator needs to complete, to view, process and report on the InstaPay deductions your employees have requested. An administrator needs to complete these actions through the payroll platform. The steps are:
Once the employee requests an InstaPay payment, the platform will create a locked post-tax deduction for the withdrawn InstaPay amount in the employees’ payroll file.
The steps on how to view this are:
- Log into Employment Hero Payroll
- Click the Employee menu.
- Click the List submenu.
- Click the employee who needs an InstaPay deduction viewed.
- Click the Pay Run Inclusions button.
Helpful Hint
You will now see under the deductions section the employee InstaPay post tax deduction.
A post-tax deduction appears in the pay run for the employee who conducted the InstaPay withdrawal. The payroll platform pays Employment Hero the withdrawn InstaPay amount into the locked bank account in the employee's payroll file.
Warning
Only have one pay run open when you are processing an InstaPay deduction. If there are multiple pay runs open, this will cause duplicated InstaPay deductions being created by the payroll platform.
Important
This will appear as a payment to Employment Hero on the ABA file.
The steps on how to process this deduction are:
- Log into Employment Hero Payroll.
- Click the Pay Run menu.
- Click the New Pay Run button.
- In the Pay Schedule field, select the Fortnightly option.
- Complete the following fields:
- Pay period ending.
- Date pay run will be paid.
- Manually add employees to this pay run.
- Create pay run with empty pay.
- Import timesheets:
- Timesheets for this pay period.
- All unpaid timesheets.
- Don't import timesheets.
- Click the Create button.
- Click on the employee's name who needs an InstaPay deduction verified.
Helpful Hint
You will now see the payroll platform has automatically applied the employees InstaPay deduction to the employees pay run details.
Important
Repeat instructional step 7 for each employee who needs an InstaPay deduction verified.
- Click the Finalise button.
- Complete the following fields:
- Date paid.
- Create pay event:
- Create pay event manually at a later date.
- Create pay event immediately.
- Click the Finalise button.
The Payroll platform allows you to run a report that will show the InstaPay transactions processed within your organisation.
The steps on how to run this report are:
- Log into Employment Hero Payroll
- Click the Reports menu.
- Click the Deductions submenu.
- In the Deduction Category, select EH InstaPay Post-Tax Deduction.
- Complete the following fields:
- Data range.
- Pay schedule.
- Employee default location.
- Employee.
- Employing entity.
- Click the Run Report button.
Warning
Ensure that you do not delete an InstaPay deduction. If you delete an InstaPay deduction, you will need to go through the reconciliation process to rectify it.
Additional information
Q: What kind of tax deduction is an InstaPay payment classed as?
A: An InstaPay payment is classed as a post-tax payment.
A: No, managers do not get a notification that their employees have applied for an InstaPay payment.
A: When an employee makes an InstaPay request, Employment Hero makes that payment to the employee directly. In the next pay run, a post tax deduction line will automatically be added to the employee so that the value of the InstaPay payment is deducted from the employee’s net pay and paid directly back to Employment Hero. The total on your ABA file will therefore be your total net pay plus these deductions.
A: Yes, you will need to include InstaPay deductions in termination pay runs.
A: No. Grouping InstaPay deductions will make reconciliation challenging.