Daily Pay from Your Nurse Staffing Agency Sounds Great. But is it Really?Posted by admin on July 29, 2011 - 12:48pm
Many healthcare and nurse staffing agencies offer what’s called daily pay. It means you get a separate pay check or direct deposit for each day you work. You work, submit a timesheet, and your staffing agency cuts you a check. Sounds pretty nice, doesn’t it? The benefit of daily pay is clear: You get paid faster than if you wait for the standard weekly or monthly paycheck. The immediate gratification is hard to pass up.
At FlexRN we offer daily pay and direct deposit as a benefit to our nurses and healthcare workers. For a minimal upfront fee of just $1-$2, we will process your timesheets and deposit funds directly into your account, typically within 24 hours of the day you work. We’re happy to offer this service to our employees, but we also think it’s important to understand the potential downsides of daily pay.
The Flip Side of Daily Pay: You’ll still pay taxes.
First, many employees mistakenly assume that daily pay means they’ll be paid the full amount of their pay rate. For example, say you work a 10 hour day at $30/hour. You would expect to be paid $300, right? The thing is, just like any other paycheck you receive your staffing agency is still required to take taxes out of your daily paycheck. So your daily pay might not actually equate to as much as you think; and this reality might change your view about the importance of receiving it on a daily basis.
You might have more withheld from your pay.
Along those lines, when it comes to taxes, you may actually end up having more money taken out of your paychecks with daily pay than you would with traditional pay. Here’s why: The withholdings taken from your paycheck for your federal and state taxes are based on your level of pay. When you elect daily pay, the taxes withheld are calculated as if that’s what you’re being paid every day. If you were to get just one paycheck a month, you’ll most likely have less tax taken out since your pay is being spread across more days. Of course this doesn’t mean you’ll pay more taxes than you should, since at the end of year everything is reconciled through your tax return (you’ll get those over-paid taxes back eventually) but most people would rather keep money in their pockets instead of giving it to the IRS.
Daily pay is a service you’ll pay for.
Finally, keep in mind that you will typically be required to pay a fee to your staffing agency for the service of daily pay. While the fee is often minimal (often just $1-$2), those fees can add up – especially if you’re working a lot. Furthermore, some agencies pay their employees’ daily pay through a debit card system and there are fees attached to the debit card for every time you use it. With standard paychecks you can avoid those fees altogether.
All in all, we would agree that daily pay is a nice perk that a staffing agency can offer to its employees. We offer it and will continue to do so. Still, we would encourage you to think through the pros and cons when making your decision and remember that sometimes, the grass is greener on the other side.
If you have questions about daily pay vs. standard pay, give us a call at (888) 781-0726.