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Getting paid every day

Thought this article about what it'd be like to get paid every day was interesting:

Thoughts? Is this even doable in your company?


  • Anything is possible if you throw enough resources at it. I will state the obvious however and that is FLSA and other labor law does not well support this approach. Minimum wage and overtime calculation is based on the workweek, and paying people daily does not change the labor law requirements. I have mostly used ADP, and SM payrolls. An extra payroll cost something like $150 in extra ADP expenses. 20 extra payrolls a month is like $3,000 month. The article is correct that we are eventually moving in that direction, but payroll and accounts payable is an expense and no company want to spend more money on these then is necessary. In fact most companies are not that happy with spending necessary expenses on these as it is. Most employers also do not have unlimited funds where they can pay faster then is normal.

    Worse, what is the advantage to paying daily to the employer? IMO, any payroll manager who proposed this should get their resume current first.

  • I would be so annoyed getting paid daily, as an employee. It seems like overkill, and it would be irritating to have to check each paycheck everyday.

  • I can't imagine having to reconcile that many payments individually as a person and it would be horrendous as a payroll/financial analyst. I currently reconcile batched credit card runs daily and that is hard enough (and none of those get lost or eaten by the dog OR rejected from the bank because dingleberry didn't change is direct deposit info fast enough).....I agree that labor and wage laws don't really support it and neither does the cost!

  • The article was a bit of fluff and at the end was promoting bit coins- by an author of a book about bit coins. While the headline teased with "paycheck" it barely, if at all, mentioned payroll. The stuff about paper was nonsense - we have paperless and electronic transfers in effect in a lot of places - it was correct that the technology is in place, but the problem is not paper and tradition or inertia. The real issue, as suggested in this discussion, is cost, control, and cash flow management.

    Looking at one aspect of this, electronic filing of tax returns and direct deposit has decreased the time between the filing of a tax return and the payment of a refund - but it has also increased the opportunity for fraud and identity theft - in response, Congress changed the due dates for filing W-2 and certain 1099-MISC forms from Feb 28 )paper) and March 31 (e-filed) to January 31 for both paper and e-filed( and the IRS is going to hold refunds for early filed returns containing certain types of refunds (such as EITC and additional child tax credit) until Feb 15. This gives the IRS time to get the information return information into the matching data base and compare it to the amounts claimed on the individual income tax returns. This will enable the IRS to prevent or detect a major portion of cases of fraud and ID theft.

    The article also ignores the reality of the cash flow cycle and the lag between when a cost is incurred and when the associated revenue is received. For example, in a growing business that carries inventory the costs of obtaining (retail) or producing (manufacturing, or even services) products before their sale and marketing costs usually grows grows faster than the cash receipts from sales as the sales usually occur sometime later than the resources that generate them are consumed (labor and other expenses) or purchased (inventory or raw materials). In that case, the business must come up with cash to cover the growth in costs during the lag time. Even in a service business, such as tax preparation, or a mature business where the costs and revenues have stabilized, labor and materials are consumed sometime before the revenue is considered earned and is collected. That presents a problem because, again, the costs have to be covered with a source of cash other than revenue during the lag time.

    On the other hand, same day pay is a reality in some situations, such as day laborers.

  • Thinking again, it is technologically possible to do this - Employee enters time or attendance info into system, info is verified, processed using an algorithim that computes tax and benefit withholding for the day's pay subject to adjustment for the workweek totals - I believe the annualized wage method does this - also, this might be handled in a way similar to the cumulative wage method or a modified quarterly average wage mehod - both based on the period of accumulation or averaging being the workweek (this is not an actual application of those methods but they might form a basis for developing an "other" method that qualifies under the maximum allowable deviations requirement).

    The daily net pay could be cleared for deposit and direct deposited and taxes deposited (all handled by the computer). If the employee works overtime during the workweek, the system would recognize this and adjust the employee's pay on a daily basis to accomodate the additional pay.

    The advantage to employers (sarcasm alert) is that employees, particularly low income employees working two or three jobs, would not be likely to have the ablity or time to keep track of everything and would not know whether they are being cheated or not.

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