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An Extensive Guide on Pay Stubs That Every Small Business Owner Needs

by Innov8tiv.com

Pay stubs are an essential aspect of paying employees. As an employer, it’s essential to provide your workers with an in-depth look at their wages. This helps to cut down on confusion and discrepancies, and it’s a physical record for the employer and the workers.

Keep reading to learn more about pay stubs.

What Is a Pay Stub?

Pay stubs provide documentation of employee wages. It details everything from the taxes to the number of hours worked. A pay stub these days is usually received electronically since most workers get their pay through direct deposit.

The federal government requires that employers keep track of employee work hours and wages, and in most states, paystubs are required to be provided to the workers as well.

 Also, check stubs help to provide a record for workers to verify their income so that it’s easier for them to get a loan, apply for apartments, etc.

What Does a Pay Stub Include?

A pay stub has specific information that’s required on it to make it legitimate. It should include the following:

Personal Information

When you’re giving out pay stubs, the worker’s identifiable information must be included. It’s a way of verifying to the employee that they received the correct pay stub. Plus, when they need the document for income verification, it’ll have their name, date of birth, partial social security number, and employee ID listed on it.

Pay Period

Whether your workers get paid weekly, bi-weekly, or monthly, the check stubs should include the pay. This is another way to properly calculate the hours worked. It also creates a chronological record of work hours and income received.

Wages

In addition to the hours worked, pay stubs should also indicate the hourly wage that accompanies the hours worked. For example, if your employees work 40 hours at $18 an hour, the check stub details that information. For most employees, this is the most important part of a paycheck.

Gross Pay

Gross pay is the amount of money that your employees receive before taxes and other deductions are taken out. For instance, if the hourly pay is $20 at 40 hours a week, then the gross pay for one week is $800. However, this isn’t the amount that workers receive.

Payroll Deductions

Federal and sometimes state taxes always come out of an employee’s wages. It’s important that that information is listed on pay stubs. Other deductions include health insurance premiums, 401k contributions, and more.

After those deductions are taken out, the check stub should have the net pay listed. The net pay is the amount that the worker takes home.

Vacation, Sick Time, and Overtime

If your employee took vacation time for that pay period, it should be listed on the pay stub. That also goes for sick time. Also, if you’re workers received overtime for that pay period, it should show the standard hourly rate plus the overtime rate.

If your business needs a pay stub generator that creates real pay stubs, check out the highlighted link.

Pay Stubs Made Easy

Thankfully, putting together pay stubs is quick and simple. These days, you can find an online check stub maker that will automate the process! You don’t need to deal with all the hustle. If this information was helpful, feel free to read more of our blog. We post a variety of content regarding technology, social media, startup businesses, and much more.

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