The slips of papers attached to cheques when a person is being paid for work that he did are known as pay stub. Those who are given pay stubs tend to be new to organizations, for example, a recently recruited worker. Pay stubs have very critical information that is relevant to both the employer and the employee and they should therefore be stored in a place that they will be safe to avoid being damaged or getting misplaced. The minimum duration in which a person is supposed to maintain the pay stub records is 2 years.
A lot of the information contained in the pay stub is often of explanatory nature. It is compulsory that information regarding how to reach the employer be included in the pay stub. The pay stub slip should also be able to indicte the name of the organization. Every crucial information about the employees such as the last four digits of their social security number and their names should also be part of the pay stub. The total earnings of an employee, along with the definition of various deductions that are subtracted from the earnings should be as well indicated in the pay stub. Following the various deductions that have been made against the gross income, the net earnings should be determined and the figure included in the pay stub. At the end of the pay stub, the dates detailing the day, month and year should be indicated. They pay stub should also encompass the aggregate income an employee receives from employment having subtracted all the deductions.
The pay stub should comprise of the summation of all the money a person will get by considering a particular rate for those individuals who receive their pay on hourly basis. Another description included is the number of hours that an employee is able to work at the different rates of payment and finally the rate of payment per hour. The various payment modes for employees who volunteer to work more hours outside the working times is also included in the pay stub.
The practice of building the relationship of the employee and the employer to both have faith in each other is built by the use of pay stubs thereby being of significant use. The employer is able to assure the employee that he is being awarded all the earnings that he is entitled to receive. Not a single person can be happy if some money is deducted from his income without them having prior knowledge as to why it was done. To be able to find out the amount of tax that is supposed to be paid by individuals and businesses, the government, also uses the pay stubs.