A Complete and Essential Guide For Your Pay Stubs
What is a pay stub?
A common response—which would also be the wrong one—is that a pay stub is the same as a paycheck.
A pay stub is only part of the paycheck. Specifically, it is the section that itemizes everything that went in and out of the paycheck. The money your employer earns before deductions and withholdings is the gross pay.
What information is on a pay stub?
In the broadest sense, the details that will be included in the pay stubs that you generate (you can create pay stubs online) for your employees can be broken down into three categories: Gross Wages, (Taxes, Deductions, Contributions), and Net Pay.
The gross pay is the simple calculation of time (hours) x pay (wages), or it may be a predetermined salary. With that amount established, you may be required to withhold state and federal taxes, Social Security, and Medicare. If you offer health insurance or other benefits, perhaps some of your employee’s money will go towards those things or retirement accounts.
A pay stub is meant to document all the money that is taken out of your employee’s gross pay. All of the information on the pay stub is a means towards this end. What is left is the net pay. Without a pay stub, your employee would see the amount she made and the amount she is receiving as two different numbers with no explanation as to why.
Lastly, when you create pay stubs online, there will be documentation of all the Year-to-Date totals of the things we just discussed. When it comes time to file taxes, your employees need to know what they paid towards state and federal taxes.
Why are pay stubs important?
Building on what we have already discussed regarding the vital information on the pay stub and what it is for, there are several reasons why you need to generate them for your employees.
It is a central point for all the information about your employee’s pay. All of their personal information and wages can be logged and stored. When this information changes, it can be updated quickly.
Due to the complicated nature generating payroll, it is common for mistakes to get made. This is not to say that they are acceptable, but should they occur, it is easier to go back to where the mistake occurred. Imagine the challenges of being able to establish where a mistake in payroll happened if there were no way of following the money trail.
Your employees might have benefits packages that may include Paid Time Off (PTO). Whether they accrue amounts of time off through time worked or if they have a bank to pull from, using pay stubs will track and document both.
How to create a pay stub?
For as much information that there is on a pay stub, and for as accurate as they need to be, creating one can be as simple or as difficult as you choose it to be.
Choosing to create your pay stubs online with a pay stub generator like 123PayStubs is the easiest way to create them quickly and efficiently. You can find instructions regarding how to create pay stubs using our pay stub generator. With 123PayStubs, you will be prompted to enter the information about your business, your employees, the hours they worked, the wages they are owed.
When you enter the deductions for your employees, 123PayStubs will account for them before calculating net pay. There will also be YTD totals for every pay stub made for each employee you have.
Pay stub templates
When you use 123PayStubs, you will have the option to use different pay stub templates. Just because you choose to pay stub generator doesn’t mean you can’t customize it to your needs.
While you create a pay stub, you will have the option to add your company’s logo on it. We have twenty different pay stub templates for you to choose from to match your company’s aesthetic.
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