Businesses will use various ways to increase their growth and success. Ensuring that your employees are satisfied is one way to boost the success of your business. One way to care for your employees is giving them accurate information on their pay. With almost all employees getting their pay through direct deposit, complacency can arise from both parties on payment of stubs, and the necessary information.
It would be of great benefit to you as the employer, the employees, as well as the business by clearly understanding a pay stub. When you fully understand a pay stub, it becomes easier if an employee has left, and identifying possible mistakes will be easier. Because of this, it becomes easier to avoid issues with IRS, as well as getting into conflicts with employees.
You should, however, know what is a pay stub. A pay stub will act as proof of payment to a worker. The payment for the employee during the period will be itemized, as well as the total for the entire year to date. Other information that will appear on pay stubs is deductions made from the employee such as tax. There are also be details of net pay or what the employee takes home. Again, a pay stub can either be electronic or paper but that may depend on your state requirements.
The pay stub will also contain information for the employer, as well as the employee. Employees will use pay stubs as records for their wages. An employee can use the information contained in a pay stub to ensure they received correct payment while understanding their deductions.
For the employer, a pay stub would be helpful when securing a loan or for a compensation claim. A good record of pay stubs would make it easier for the employer when resolving pay discrepancies. Pay stubs should, however, contain certain information.
It is mandatory for a pay stub to have taxes, contributions, deductions, gross pay, and net pay. Gross pay is what is paid to the employee before deductions were made. There is, however, a difference in gross pay calculation which depends on whether employees receive yearly salaries or hourly pay.
A pay stub will have all hours worked if a worker receives hourly payment. That information will be crucial because it will help them ensure they get paid for the correct hours worked for during a particular pay period. Also, salaried workers can have the hours worked on the pay stub.
In the case of non-exempt workers, the number of hours worked could be different and would include regular hours, double time, and overtime. To avoid confusion, however, their pay stubs should show the number of hours worked on different lines for clarity.