A pay stab is part of the paycheck that contains the details of the employee’s pay. It lists the wages earned for that particular pay period and year-to-date payroll. It also indicates the taxes and other deductions made from the wages of an employee. The pay stub, shows the actual amount an employee receives.
You can give your workers either an electric or printed pay stub. It is a requirement by some states to give the workers the pay stub. The information that is added on the pay stub will vary depending on the state. You can retain a copy of each payroll stub for your payroll records.
The Work of Payroll Stubs
The information found in the pay stub is useful to both the employer and employee. For the employees, this is a record of their wages. They can use the information to assess whether they were paid correctly and also appreciate their deductions.
The employer can use the pay stub to settle discrepancies with employee day. If an issue comes up about the worker’s pay; you can use the payroll pay stub to fix the problem. The pay stubs are also useful when filing taxes as you can apply to them to fill the employee’s Form W-2.
What is Included in the Pay Stubs
There is a lot of information included in the pay stub to help both the employer and employee keep track of payments and deductions. Below is the information that is contained in the Pay stubs.
Gross wages are the starting point of a worker’s pay. The gross wages is the total amount an employee is owed before the deductions have been taken out. The gross pay is calculated differently based on whether the employee is paid a salary or hourly. When calculating the hourly pays, the hourly rate is multiplied by the number of hours worked. When it comes to the salaried workers the annual salary is divided by the number of payment periods in the year.
During the payment period, the workers do not take home the gross salary. Payroll taxes, as well as other deductions, are made to reduce their earnings. The pay stub will list down the deductions allowing the employee to see the amounts that have been taken from their gross pay. Some of the common deductions on a pay stub include employer deductions, benefits and other contributions, and employee tax deductions.
Net pay is the amount that remains once the deductions have been made from the gross pay. This is the amount that the employee will take home. This is the money that an employer will write on the employee’s paycheck or direct deposit into their bank account.
The pay stubs records net pay hence you can find both the current net pay for the pay period and the year-to-date net pay.