Pay stubs are an essential part of any business and crucial for employees.
If you run a small business, the first thing on your mind probably isn't, "what are employment pay stubs?", but you'll soon learn that they're very necessary for multiple reasons. And for employees, you're going to need to hang on to your pay stubs so you can do your taxes properly.
In this post, we're going to go over what pay stubs are, what should be displayed on them, and why both the employee and the employer will benefit from them. Let's get started.
What Are Employment Pay Stubs?
While it is not required for an employer to give out pay stubs to their employees, it's becoming the norm and it's essential that employees receive some form of pay statement each pay period. Pay stubs are the most detailed version of the written pay statement.
When you give out a paycheck, often the pay stub will be attached to it with a perforated line. When the employee cashes the check, the idea is that they hang on to the pay stub for their own records. If the employer pays their employee digitally or via direct deposit, pay stubs can often be accessed online.
What Should Be Displayed On a Pay Stub?
If you're an employer, there are various pay stub creators available to you online. Sites like Paystubcreator.net and thepaystubs.com are popular sites that allow you to create personalized pay stub templates to use over and over again.
A typical pay stub would include these things:
- Employee info (Name, address, SSN).
- Employer info (Name and address).
- The dates of the pay period.
- The employee's pay rate.
- Earnings before deductions.
- Federal, state, and local taxes, any employee contributions, and other deductions like life or health insurance.
- At the bottom display gross pay, total deductions, and net pay.
They Benefit Everyone
Pay stubs are beneficial to all involved. To employers, it might seem unnecessary to spend all this time calculating and typing out every single employee's payment information, but it allows you to keep records of what you paid employees in the event of a dispute. It also helps you during tax season.
For the employee, you need to keep track of this information for tax purposes. It's also a great help when it comes to budgeting, understanding where your money goes and shows that you've been paid properly. Pay stubs can also be used as proof of employment when applying for a loan or landing a new apartment.
Pay Stubs Are the Future
If you're still wondering, "what are employment pay stubs and why should I use them?", just know that they're mainly a system for recording keeping. Giving out and receiving detailed pay stubs are the best way to keep track of your business' finances and, if you're an employee, your own finances.
Try out one of the online pay stub creators today and see how easy it is to create individual pay stubs for your employees. To read more helpful posts on running a business in America, visit usanews.net.