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 shows the taxes and other deductions taken out of an employee’s earnings. It then shows the net pay the worker gets.
Pay stubs can be given either as electronic or printed. It is a requirement by some states to provide pay stubs. The info included in the pay stubs differs from state to state. It is good to keep a copy of each payroll stub for your payroll records.
What is the Use of Pay Stubs
The information that is included in a pay stub is useful to both the employer and the employee. The employees are offered with the pay stubs as a record of their wages. They can use the information to assess whether they were paid correctly and also appreciate 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 information that is contained in the pay stub is useful to the employer and their worker as it helps them keep track of the payments and deductions. Read on to find out the information included on the pay stubs.
Gross Wages: Gross wages form the starting point of an employee’s pay. The gross wages is the total amount an employee is owed before the deductions have been taken out. The gross pay is calculated differently depending on whether one is paid a salary or hourly. When calculating the hourly pays, the hourly rate is multiplied by the number of hours worked. To get the salaried employee’s gross pay, divide the annual salary by the number of pay periods in the year.
During the payment period, the workers do not take home the gross salary. There are payroll taxes, and other deductions made that reduce their gross earnings. The pay stub will list down the deductions allowing the employee to see the amounts that have been taken from their gross pay. Some of the common deductions on a pay stub include the employee tax deductions, employer contributions, and benefits and other contributions.
Net pay is the amount that remains once the deductions have been made from the gross pay. This is the amount that the employee will take home. It is the money that the employer will indicate on the worker’s paycheck or 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.