By investing in a credit union employees have the ability to not only save through payroll, but also borrow money at a competitive rate, which they may not otherwise have access to. Credit unions are generally more open to accepting borrowers, meaning those with bad credit ratings may still be eligible for a loan. As an employer you will not know whether your employee is saving or borrowing. Members who wish to apply to join our saving through payroll charter can do so here. This is restricted to those members who offer a three-day turnaround on setting up a payroll deduction on a fee-free, not-for-profit basis.
The process is incredibly straight forward from the perspective of the employee, the employer and its payroll, human resources and finance functions. It is also effectively anonymous
Typically an employer receives advice from the credit union to start making deductions through an electronic file which can be uplifted into the payroll software; though employees are increasingly approaching their employers’ payroll professionals in the first instance.
Payroll communicates with the credit union with respect to dates and human resources will seek clarification of the deduction from the employee - with a signed pay agreement form which instructs payroll to make the deduction.
Payroll will then request a payment schedule in accordance with payroll frequency from the credit union and set up on the payroll software a credit union deduction. Payment is deducted from employees’ net pay and finance is informed to make the required payment to the credit union provider.
Credit union charter
The CIPP is encouraging all payroll service providers to offer free payroll deductions for saving through payroll into a credit union
Why should I support free deductions for credit unions?
- It shows support of your clients benefit and reward strategy, aligning you with their values
- Your clients employees will benefit from reduced stress and increased well-being; which in turn leads to greater productivity and profitability
- It will give you competitive advantage over service providers who are not offering credit union deductions as part of their payroll service
- The CIPP will only sign-post to credit unions that meet our standard, giving you piece of mind
- We are the education partner to the Retail Trust, which has in excess of 5,000 members, and will sign-posted to service providers who offer free processing of credit union deductions
- Credit unions are regulated by the Financial Conduct Authority and the Prudential Regulation Authority
Organisations who wish to apply to join our charter should email firstname.lastname@example.org. This is restricted to those members who offer a three-day turnaround on setting up a payroll deduction on a fee-free, not-for-profit basis.
Organisations supporting free processing