One-Third of Millennials Now Rely on Gig Payments and Tips as Primary Income

Nearly one-third of millennials depend on transactional payouts from gig work and tips as their main source of income, replacing traditional paychecks with a piecemeal approach to earning that demands instant access to money.

This finding from the PYMNTS Intelligence report “Instant Payouts: The New Paycheck for a Real-Time Economy” highlighted a shift in how young workers structure their financial lives and underscored the growing importance of real-time payment systems.

Based on a survey of 4,054 consumers in the United States, the report revealed that 72% of consumers received at least one instant payment in the past year. More than 1 in 5 consumers who received disbursements relied on these payouts as their primary income source, amounting to approximately 31 million individuals.

Among the key findings:

Bridge millennials, the crossover generation of older millennials and younger Generation Xers, showed the highest willingness to pay for instant access to money at 48%, followed by millennials at 47%, Generation Z at 39%, Gen X at 31% and baby boomers at 8.2%.

Among consumers receiving 15 or more disbursements annually, 85% received at least one payment instantly, and 43% of this group cited instant payments as their most-used method of receiving money.

The share of consumers who count on disbursements as a primary income source and said they would pay to receive their money instantly stood at 60%. That rate was four times higher than the 15% rate among those receiving only occasional payouts.

The research identified three groups of disbursement recipients. Core cashflow users, representing 21% of recipients, rely on disbursements as primary or substantial income. Supplemental cashflow users, at 41%, view these payments as regular but not primary income. Incidental cashflow users, making up 38%, receive disbursements rarely or in negligible amounts.

The types of payments feeding this new paycheck economy varied, per the report.

Among core cashflow recipients, 34% received payment for goods or services sold online, while 29% got paid for freelance or consulting projects. Twenty percent received tips, and an equal share collected sales commissions or employer bonuses.

Financial stress appeared to drive demand for instant access. Consumers living paycheck to paycheck while struggling to pay bills showed the highest willingness to pay for instant disbursements at 38%. This compared to 32% among those living paycheck to paycheck but managing comfortably and 24% among those not living paycheck to paycheck.

The generational divide extended beyond willingness to pay. Seventy-eight percent of Gen Z consumers received at least one instant disbursement last year, and 45% cited it as their primary receiving method. Millennials followed at 75% and 43%, respectively. Even baby boomers showed substantial adoption, with 65% receiving at least one instant payment.

Income level also influenced adoption patterns. Among individuals earning at least $100,000 annually, more than 3 in 4 received at least one instant payment in the past year, and 42% called it their preferred method. For those earning less than $50,000, the rates dropped to 61% and 37%.

The shift from traditional direct deposit to instant payments reflects changing work patterns and financial needs.

Digital wallets and debit cards now rival real-time bank transfers as preferred instant payment methods, suggesting consumers prioritize accessing money where needed over routing money to bank accounts.

At PYMNTS Intelligence, we work with businesses to uncover insights that fuel intelligent, data-driven discussions on changing customer expectations, a more connected economy and the strategic shifts necessary to achieve outcomes. With rigorous research methodologies and unwavering commitment to objective quality, we offer trusted data to grow your business. As our partner, you’ll have access to our diverse team of PhDs, researchers, data analysts, number crunchers, subject matter veterans and editorial experts.