A pay stub is a part of the paycheck which you will use in your business to document your employee’s pay. This pay stub will include all of the information your worker needs about their pay including wage earnt in that month, yearly wage and also any taxes which need to be deducted.
As a business owner, you can try Making pay stubs online and you will be able to give your employees either a paper copy or a digital one which they can print out if they do so wish. The common practice is that when you create a pay stub, you keep a copy for your own records.
What are they for?
The whole point behind a pay stub is to provide information that both the employee and the employer will need. For example, it allows an employee to look through and make sure that they are being paid the right amount, and also that the amount they are being taxed is correct.
For an employer, a pay stub provides evidence of payment records which can be used in the case of a payment dispute with the employee. For example, if an employee thinks that they haven’t been paid enough, you can use a pay stub to prove that they are wrong.
What is on a pay stub?
There are a lot of important details kept on a pay stub, however, the most important ones are as follows:
Tax and pensions
We can now take a look at each of these things in more detail so that you are aware of exactly what information needs to go on a pay stub.
Gross wages are the value which the employee is owed before any other dedications are made to the wage slip. This is the value which the employee earns every hour, week or month depending on how you calculate your salaries. It is the first line of any war slip because this will be the value where everything else is taken from.
Tax and pensions
Once the gross wages are calculated and added onto a pay stub, they need to be adjusted depending on their tax band and any other commitments they have agreed to such as a pension. This is a value which will be calculated line by line and stated as separate values for the record of yourself and your worker.
Once the deductions are taken from the gross wages, the net pay is the value which is left on the pay stub. This is the actual value of money the employee will take home with them.
Creating a pay stub is a simple process and it is an essential part of being a business owner. Make sure that you follow the guidelines carefully, check what information must be present according to your state or country, and take your time with calculations. By the end, you will have a pay stub template which can be replicated for every employee in the future.