Today’s workers face ongoing financial hurdles, with the latest data revealing that 66% of Americans currently live paycheck to paycheck. While this financial insecurity has been present throughout the past few years, what has recently changed is the expectation of the role employers play.

Businesses are now being asked to provide financial wellness benefits and offerings that help their workers gain more financial security in such economic uncertainty. According to a Transamerica Institute Report, 77% of workers see financial wellness programs as a crucial benefit—even though only 28% of employers actually offer them. Not only do most businesses lack these offerings, but the way they’re paying their employees actually adds to their financial stress. 

Hidden Payment Fees Taking a Bite Out of Employee Paychecks 

The last thing someone living paycheck to paycheck needs are hidden fees that eat away at their checks. In fact, this financial strain can easily bleed into their working life, with  1 in 4 employees saying that financial stress lowers their work productivity.

Unfortunately, with many traditional paycard or banking solutions, there are multiple fees that can add up for your workers. Some of these fees are more well-advertised, while others may be hidden or unknown until an employee sees them hit their bank account. 

If you want to show your employees you’re taking steps to address their financial challenges, it’s wise to ask yourself: is the way you’re paying people actually costing them money?

When evaluating the paycard solutions or other employer-sponsored financial offerings you plan to provide your workforce, be sure to look out for the following fees. These can be common across traditional employee paycards and banking solutions:

Overdraft fees

When you’re living paycheck to paycheck, unexpected expenses can completely derail your budget. If an employee overestimates the balance in their account and charges something over that amount, most banks charge an overdraft fee. On average, these fees are around $35—which is no small amount for someone already struggling to get their head above water.

Overdraft fees can exacerbate the financial strain many Americans already feel, and it’s easy to see how someone can get caught in a cycle of debt from overdrafting their account.

💡Did you know? Branch doesn’t believe in overdraft fees. Employees that use the Branch Card aren’t able to overdraft their account, meaning they are spared the hefty fees that can quickly pile up. 

ATM fees

Many pay card providers charge a fee for ATM withdrawals, meaning that workers lose money if they want to withdraw cash. While cash use is on the decline, many workers still want the option to take cash out, so be sure the solution you’re evaluating comes with in-network ATM options. This ensures workers can always find a place for free ATM withdrawals, eliminating the worry that they’ll be stuck with ATM fees for accessing their cash.

💡Did you know? Branch offers 8 free in-network ATM transactions per month, and even includes a convenient ATM finder within the Branch App so that users can easily identify the nearest free option.

Transaction fees

It sounds bizarre that some companies would choose to charge your employees for using their own money—but it happens more than you might think. Some tip management platforms charge employees transaction fees for every purchase they make. And sometimes employees get charged even for the transactions they don’t make, as certain pay card providers charge for declined transactions.  For people facing financial insecurity, the thought that it would cost them additional money to spend money doesn’t make much sense. 

💡Did you know? Some providers charge transaction fees as high as $1 per purchase or declined transaction. At Branch, we don’t think it should cost employees anything to use their Branch Card; no transaction fees, here. 

Inactivity fees

Some paycard providers charge inactivity fees if the card isn’t used for a certain amount of time. These can vary in length from 90 days to 12 months; and employees may be charged the fee each month until they use their card again. 

Whether an employee is trying to monitor their spending or simply using another card or financial service, we don’t think anyone should be penalized for a lack of spending. 

💡Did you know? At Branch, we do not charge inactivity fees if an employee doesn’t use their card or account. 

Providing Better Financial Options for Your Workforce

As more workers turn to companies to support them with financial services and resources, it’s wise to think about how you’re paying your employees—and to consider whether the pay card solution or financial services you’re offering might actually be costing them. 

Making sure that employees have fee-free ways to access their earnings—in addition to extra financial wellness tools and resources—can help boost their workplace satisfaction and their financial future all at the same time.  

Learn about Branch’s paycard solution here.