As a business owner, your to-do list is long. Seemingly endless administrative requirements can be an unwelcome distraction from doing the work you love.
Running payroll is one task that is time consuming, but essential to keeping your doors open. You have to make sure your employees get paid, and in most states you also need to provide a pay stub.
In the beginning, you will probably have so many questions. What is a pay stub? Why is it important? What does a pay stub look like?
To make your life easier, we found some answers for you. Read on for an abundance of helpful information about pay stubs.
What Is a Pay Stub?
A pay stub can also be called a paycheck stub or a pay slip. It’s the document that comes with each paycheck, and it provides important details for employees about their pay.
Pay stubs can be printed on paper or made available online. You can go the old fashioned route and format them yourself, or you can simply your life by using a pay stub generator.
Why Are Pay Stubs Important?
Pay stubs make payment specifics easy for employees to access, so they know exactly where their money is going each pay period. People are commonly asked to show them as proof of their income when they apply for an apartment or try to get a loan.
As an employer, pay stubs are useful for record-keeping. They save time, because employees can look at them for answers to their payroll-related questions instead of coming to you. You can refer back to them if you need to confirm that someone on your team has been paid properly.
What Does a Pay Stub Look Like?
Employment pay stubs come in a variety of sizes and formats, but they all include the same basic information.
A pay stub should list your company’s name and address, along with the employee’s name and social security number. It should also specify the dates the employee is receiving payment for, called the pay period.
Total earnings for the pay period should be broken down into gross pay, deductions, and net pay. They gross pay is the total amount of earnings before deductions. Deductions might include federal, state, and local taxes withheld, and payroll taxes for medicare and social security. Any retirement plan and insurance contributions should also be noted.
The net pay is the amount of money left after deductions. In some cases, special bonuses or back pay could be added to the net pay, making the check amount larger than usual.
For hourly employees, pay should be broken down into regular and overtime columns, with totals shown for each.
In addition to these necessary details, pay stubs often display used and remaining vacation and sick time.
Employees also appreciate year-to-date totals, which can help them keep track of their income and calculate how much they will owe in taxes.
Printed or Paperless?
Although there is no right answer to what does a pay stub look like, many employers prefer online solutions. Pay stub generators are hassle-free and fast, and they save storage space and paper. Employees also enjoy the convenience of having access to their pay stubs from anywhere.
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