Processing an InstaPay deduction | Payroll Guide

How it works

InstaPay is an Earned Wage Access (EWA) product that revolutionises the way users get paid. It allows users to access their money as they earn it. InstaPay is available to employees of an organisation that uses a compatible payroll and HR connection, and your employees can only access the feature via the Swag app.

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 The payroll platform will pay Employment Hero the withdrawn InstaPay amount, and this will show as a line item in the downloaded ABA file.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. Employment Hero 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.


InstaPay is not available on the employees' paid date, as shown by your generated pay run.


Payroll Plan:   Standard   Premium

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:

Stage 1: View an InstaPay deduction

Once the employee requests an InstaPay payment, the platform will create a locked post-tax deduction for the withdrawn InstaPay amount in the employees’ payroll file.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:

  1. Log into your Employment Hero Payroll platform
  2. Click the Employee menu.
  3. Click the List submenu.
  4. Click the employee who needs an InstaPay deduction viewed.
  5. Click the Pay Run Inclusions button.

    Helpful Hint

    You will now see under the deductions section the employee InstaPay post tax deduction.

Stage 2: Processing an InstaPay deduction

A post-tax deduction appears in the pay run for the employee who conducted the InstaPay withdrawal. The payroll platform pays us the withdrawn InstaPay amount into the locked bank account in the employee's payroll file. The steps on how to process this deduction are:


Only have one pay run open when you are processing an InstaPay deduction. If there are multiple pay runs open, it will cause the platform to create duplicate InstaPay deductions. The deducation will appear as a payment to Employment Hero on the ABA file.

  1. Log into your Employment Hero Payroll platform.
  2. Click the Pay Run menu.
  3. Click the New Pay Run button.
  4. In the Pay Schedule field, select the Fortnightly option.
  5. Complete the following fields:
    • Pay period ending.
    • Date pay run will be paid.
    • Manually add employees to this pay run.
    • Create a pay run with empty pay.
    • Import timesheets:
      • Timesheets for this pay period.
      • All unpaid timesheets.
      • Don't import timesheets.
  6. Click the Create button.
  7. Click on the employee 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.



    Repeat ‌step 7 for each employee who needs an InstaPay deduction verified.

  8. Click the Finalise button.
  9. Complete the following fields:
    • Date paid.
    • Create a pay event:
      • Create a pay event manually at a later date.
      • Create a pay event immediately.
  10. Click the Finalise button.
Stage 3: Reporting on an InstaPay deduction

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:

  1. Log into your Employment Hero Payroll platform.
  2. Click the Reports menu.
  3. Click the Deductions submenu.
  4. In the Deduction Category drop down, select the EH InstaPay Post-Tax Deduction option.
  5. Complete the following fields:
    • Data range.
    • Pay schedule.
    • Employee default location.
    • Employee.
    • Employing entity.
  6.  Click the Run Report button.


  What kind of tax deduction is an InstaPay payment classed as?  

You would class an InstaPay payment as a post-tax payment. 

  Do I get a notification that an employee has applied for an InstaPay deduction?  

No, managers do not get a notification that their employees have applied for an InstaPay payment.

  Why does the total on my ABA file differ from my total net pay in my pay run?  

When an employee makes an InstaPay request, Employment Hero pays ‌the employee directly. In the next pay run, we will add a post tax deduction line automatically onto the employees record. Doing this will make sure we deduct the value of the InstaPay payment from the employee’s net pay. The total on your ABA file will therefore be your total net pay plus these deductions.

  Do I include InstaPay deductions in termination pay runs?  

Yes, you will need to include InstaPay deductions in termination pay runs.

  Should I group InstaPay deductions?  

No. Grouping InstaPay deductions will make reconciliation challenging.

  Will payroll admins and business owners receive a notification of their employees' InstaPay requests?  

Yes, the payroll admin email address will receive a confirmation email regarding the first InstaPay request by an employee in their business, and you will be able to see all InstaPay deductions made by your employes under the Transaction History subheading.

Author recommended

So you have now learned how to process an InstaPay request in payroll and you are now wondering, what next can I do? There are two recommendations I would make on this front and they are:

  • InstaPay Eligibility | HR Guide This article will walk you through the six conditions that you must meet first before you can become eligible for an InstaPay payment. 
  • How to set up an InstaPay request | Money InstaPay allows you to access your money as you earn it, and is available to employees employed by an organisation that uses the Employment Hero Payroll platform. 
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