A pay stab is part of the paycheck that contains the details of the employee’s pay. It lists down the wages earned for the pay period and year-to-date payment. It also lists down the taxes and other deductions made out of the employee’s earnings. It then shows the net pay the worker gets.
You can give your workers either an electric or printed pay stub. It is a requirement by some states to provide pay stubs. The info included in the pay stubs differs from state to state. It is advisable that you retain a copy of each payroll stub for use in your payroll records.
What is Payroll Stubs Used for
A pay stub contains information that applies to both the employer and the employee. The employees receive the pay stubs as records of their payments. 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.
The Components of a Pay Stub
There is a lot of information included in the pay stub to help both the employer and employee keep track of payments and deductions. Here is what is listed in the pay stubs.
Gross wages are the starting point of a worker’s pay. Gross wages include money owed to the employee before the deductions are made. The gross pay is calculated differently depending on whether one 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. Deductions are listed on the pay stub to enable the employee to see the amounts 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: The net pay is the amount left over after the deductions have been subtracted 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.