Small Business Owner on Payday

Payphoria | The Emotional Highs and Lows of Payday


For many of us, the payday rollercoaster is all too familiar. From the growing panic that builds when the countdown is on, to the soaring joy (not to mention relief) that hits as soon as the big day arrives – we tend to have a huge emotional and psychological response to our earnings.

Exploring payday behaviours across the country, new research from the team at Xero has captured the highs and lows with the help of 1,000 nationally representative respondents. And while many Aussies are feeling the pinch in the lead-up to the pleasure of payday, rushes of aptly named ‘payphoria’ are sweeping the nation each time we get paid.

Spending big, cutting back and changing habits

It’s not surprising that when payday finally comes around, people want to reward their hard work. Gripped by feelings of ‘payphoria’, one in three Australians splash more cash on payday than usual. This means a free pass to treat themselves or others, have a night out with friends or family, make an extravagant purchase, book a trip or event, or buy a new outfit – with 80 percent recognising that they work hard, and deserve to enjoy their money now in return.

Amongst all the celebration, however, the payday pinch is a very real concern. In an effort to conserve cash in the lead-up, the study uncovered that many cut back on much-loved rituals such as coffee and eating out, with 34 percent even delaying paying household bills. While one in three workers have less than $100 in their bank account ahead of payday. And a significant portion of people are relying on short term fixes to support themselves, such as Afterpay, payday loans, credit cards or overdrafts.

The splurging, the saving and the struggling

The results are in: Aussie’s largely consider themselves to be a nation of savers. However, over one in two know that they should save more… but that would mean giving up on luxuries. The study also linked the frequency at which people are paid to their ability to save, finding that those paid monthly were more likely to do so, while those paid weekly were more likely to be spenders. Location also came into play, with urbanites more likely to be savers than those in rural areas.

While a quarter of workers found that the timing of payday impacts their lifestyles, primarily making it hard to manage money and meet day to day needs (70 percent), while also encouraging extravagant spending (45 percent). All of which casts a spotlight on the economic impact of payday for all Australians, and the economy more broadly.

Making payroll smoother, smarter and fairer

In any discussion around payday, the starting point has to be for employees to be paid on time, accurately, and with the correct benefits. There are a number of reasons why employees might be experiencing anomalies with their pay, but the majority of employers try to do the right thing when paying staff. The ATO’s Single Touch Payroll (STP) legislation ensures that all businesses in Australia are reporting their payroll digitally, improving efficiencies and reducing errors. This new way of working will help business owners to streamline their operations and act as a catalyst for greater accuracy, security and timeliness when paying employees.

In the end, however, it’s not just about the hard-earned cash. From heightening our emotions and shaping our habits to ultimately dictating how we live our lives – it’s safe to say that payday is much more than just a financial boost. And despite the struggles faced during the countdown, there’s nothing quite like that feeling we get when the big day arrives. ‘Payphoria’ says it all.

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