Pay stubs are as important for you as they are for your employees and contractors. When they go to apply for a loan, albeit for a car or a home, they will need to show proof of income. They need these for their records when it comes time to pay their income taxes.
As an employer, you will need them for the same reasons—especially for taxes. For example, every quarter you will need to file your Form 941, the Employer’s Quarterly Federal Tax Return. Amongst other things, you will need to account for your number of employees and their wages. Without the right documentation, this will be a nearly impossible task.
With proper pay stubs, you will be able to transfer information easily. Get your pay stubs right the first time, and save yourself additional hurdles later. Here’s how to create the perfect pay stub.
At first, this can seem obvious, abundantly so. But that doesn’t mean you can’t create problems for yourself in this section. The easiest parts of this section include your business name and address. That’s not to say neither is important, but this information should be readily available to you.
The part where you can get tripped up is your Employer Identification Number (EIN). This is the unique nine-digit number assigned to your business by the IRS. You didn’t get into business to create pay stubs. We get it. It is a necessary piece of continuing to be in business. So if you’re juggling multiple tasks at once (as business owners do), don’t miss a digit in your EIN. Take care of your people by doing it correctly.
An additional bonus feature of using a pay stub generator like 123PayStubs is the pay stub templates. There are twenty different pay stub templates to choose from that vary with color and layout. Match your business’s aesthetic with our pay stub templates to give them a personalized feel.
This is where the calculations begin. Fill in their name and their Social Security number (to be pulled from their W-9 or W-4).
To get this pay stub accurate, enter in the appropriate wage they earn, their hours worked, and their filing status: single or married. Again, this can be pulled from the W-4 or W-9 that you had them complete upon being hired.
With a pay stub generator like 123PayStubs, you will be able to see how your taxes and withholdings are being calculated. This includes Federal and State Withholdings, Social Security, and Medicare.
Even with a reliable and reputable pay stub generator like 123PayStubs, these taxes will only be as accurate as the information you provide. This is to stress the importance of the first two sections we’ve discussed. Each piece is a building block for the next.
Earnings and Deductions
This, too, is where a great pay stub generator pays dividends. If you’ve done your due diligence and entered in the proper information, earnings and deductions will be done and presented to you.
With 123PayStubs, all you need to do in this section is enter in the hours worked. You’ve already provided their wages, and after which, you’ll see their total earnings for the pay period. You’ll see their Year-To-Date (YTD) totals. This extends to deductions as well. And just like wages, you will see the totals for the current pay stub and YTD.
Gross and Net Pay
As someone new to pay stub generators, these two terms might confuse you. To create the perfect pay stub, these two values are very important.
Gross pay is the money paid out before deductions and taxes are taken out. Net pay is what remains. When using 123PayStubs, you will have the benefit of seeing current and YTD gross as well as current and YTD net.
Creating the perfect pay stub is not difficult with the right tools. Much like cutting your lawn would be significantly harder with scissors as opposed to a lawnmower, using the proper tool for the job is fundamental.
By using 123PayStubs, your biggest task is providing accurate information. Federal and State Taxes, Social Security, Medicare, deductions, gross pay, and net pay.
Creating the perfect pay stub is easy if you let it be.