A pay stab is a paycheck section that displays information about the employee’s pay. It itemizes the salaries earned during a pay period and the 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.
As an employer, you can provide your employees with printed or electronic pay stubs. It is a requirement by some states to provide pay stubs. The information that is added on the pay stub will vary depending on the state. It is good to keep a copy of each payroll stub for your payroll records.
What is Payroll Stubs Used for
The information that is included in a pay stub is useful to both the employer and the employee. For the employees, this is a record of their wages. Employees can review their pay stubs to ensure that they were paid the correct amount and understand 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. You can also use pay stubs to fill out the employee’s Form W-2 during tax filing.
What is Included in the Pay Stubs
The pay stub contains a lot of information that will help the employer and the employee to keep track of deductions and subsidies. Below is the information that is contained in the Pay stubs.
Gross Wages: Gross wages form the starting point of an employee’s pay. Gross wages is the money that the worker is owed without the deductions being made. The gross pay is calculated differently based on whether the employee is paid a salary or hourly. For the hourly workers, the hourly rate is multiplied by the number of hours’s worked. The salaried worker’s pay is arrived at by dividing the annual salary with the number of pay periods in the year.
Taxes, Deductions, and Contributions: Normally, the employees do not take the gross salary during the payment period. Payroll taxes, as well as other deductions, are made to reduce their earnings. The pay stub will list down the deductions allowing the employee to see the amounts that have been taken from their gross pay. Deductions include the employee tax deductions, benefits and other deductions, as well as employer contributions.
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 worker will take back home. It is the amount that the employer indicates on the employee’s paycheck or direct deposit into their bank account.
Normally, the pay stub record the net pay thus you can find both the current net pay for the pay period and the year-to-date net pay.