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What to Include on a Pay Stub

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Payroll employees are responsible for withholding taxes and issuing payments on a regular schedule. No matter how you pay your employees (direct deposit, withholding taxes) there is one thing you must give your employees: a pay slip. What is a pay slip? What exactly is a pay stub and how do you get one? Is it necessary to give one to employees?

Pay stub is also known as a “check stub” and it’s a part of a paycheck. It lists details about an employee’s salary. It lists the wages earned during the pay period as well as the year-to-date payroll information. It also lists taxes and other deductions that an employee has taken from his earnings. The pay stub also shows how much the employee actually gets (i.e. net pay).
What’s on a pay slip?

A pay stub can help you and your employees keep track of deductions, taxes, and payments. The following items are generally found on a pay slip:

Gross wages
Employer taxes
Contributions from employers
Employer taxes
Net pay

Take a look below at the different categories to see what information you should include on a pay stub.
Gross wages

Gross wages are the base salary of an employee. Gross wages is the amount you owe your employee before taking out taxes and deductions. You must include any nontaxable income earned by an employee in gross wages.

The method you use to calculate an employee’s gross wage depends on whether they are salaried or hourly. Divide the hourly rate of the employee by the hours worked during the pay period. Divide the annual salary of a salaried worker by the number pay periods within the year to find their gross pay. A paystub generator can help with this process.

The pay stub typically shows gross pay information in two columns: year-to-date and current gross pay

The following information may be included in the gross pay portion of an employee’s stub:

Hours worked must be included in the pay stubs of hourly or nonexempt salaried workers. Employees who are not exempt can work multiple hours such as overtime, regular, or double-time. On the pay stub, include the hours worked for each type of hour. Make sure that each hour worked is listed on the pay stub. It is possible to record hours worked by salaried employees on pay stubs. However, this is not required. You can separate the hours worked into year-to-date and current columns.

Pay rate: Include the employee’s rate of pay on their pay stub. Note the hourly rate of each hourly worker if they are hourly workers. Show the amount of salary for each pay period worked if you have a salaried employee. Record the employee’s individual pay rate on the pay slip for overtime, double-time, and other special circumstances. worked.
Employer taxes

Gross pay is not taken home by employees. Employees’ earnings are reduced by payroll taxes and other deductions (we’ll come to those later). Employees can view all tax amounts taken from their gross wages on the pay stub.

Payroll taxes for employees on a pay slip include:

Federal income tax
FICA tax on the employee (Social Security, Medicare taxes)
Income tax in the state
Local income tax
For Alaska, New Jersey, Pennsylvania, there is a state unemployment tax
Taxes that are specific to the state and the local area

Create a line on the pay stub for each tax. Include the amount withheld for current pay period as well as the year-to date. Separate employer-paid taxes and employee-paid taxes on your pay stub.

Payroll deductions for a pay stub can vary depending on what benefits you offer to employees of small businesses. An employee could contribute to retirement plans or insurance premiums.

You can also deduct charitable contributions and payments towards loans. Each deduction should be listed on its own line. Current and annual totals are also shown.
Contributions from employers

You may not be able to deduct certain line items from an employee’s gross pay stub depending on how your business operates. These are generally amounts that you contribute as an employee.

You might contribute to:

Health insurance premiums
Plans with 401(k).
HSA (Health Savings Accounts)
Other retirement plans

Each contribution should be listed on its own line, with the current and year-to date totals.
Employer taxes

Employers are required to pay payroll taxes for every employee. These taxes should be included in separate sections with the current and annual totals. These taxes are paid by employers to their employees.

Federal unemployment taxes (FUTA tax)
State unemployment taxes (SUTA tax)
FICA tax on the employer

You should check with your state to determine if you are required to pay any additional employer-paid taxes.
Net pay

Net pay or take-home pays is the difference between the gross and net pay. It’s the sum left after deducting all taxes and deductions. Include nontaxable income if the employee is receiving it after deducting all taxes and deductions.

After deducting taxes and deductions you get the employee’s take home pay. The total amount that you pay an employee is called the net pay.

On the check stub, include both the year-to-date and pay period net payments.
What do pay stubs serve?

Employers and employees both have access to the pay stub.

Pay stubs are records of wages that employees receive. Employees can review their pay stubs to verify that they were properly paid and to understand the deductions.

Pay stubs can be used by employers to resolve discrepancies in employee pay. You can look at the payroll stub to resolve any questions about employee pay. Check stubs can be used to fill out Form W-2 for each employee during tax time.
Are my employees required to provide pay stubs?

Employers may be required to provide pay stubs in some states. You may need to include different information on your paycheck stub.

E-paystubs and paper pay stubs can be given to employees. You may be able give your employees online access to their pay slips if you have payroll software. You should keep a copy each payroll stub for employee payroll records.