What Information Is On a Pay Stub?
As an employer, you should perfectly understand information on a pay stub to help identify errors on your payroll. An employee can also use the information on the pay stub to plan financially. A pay stub is considered a crucial payment documents that provide important information concerning an employee’s pay. An employee learns about the amount that he or she has earned within a working period and all the deductions and contributions taken out of the pay. Several states have made a pay stub a mandatory document that every employer should have for all the employees. It helps in filing tax returns accurately and getting tax refunds. Here is a piece of important information that you should know about a pay stub.
Both employers and employees consider a pay stub a useful document. A pay stub is useful to an employee since it acts as proof of earnings and contributions made in a specified duration. Once an employee receives the pay stub together with the paycheck, he or she can review it to ensure there are no errors in the pay and understand all the deductions that were made. For an employer, a pay stub is a vital document for settling discrepancies with employee pay. The first step to handling issues raised by an employee regarding the pay is checking the pay stub. Also, some employers use the pay stub to fill each employee’s Form W-2 in taxation. In the homepage of this site, you will read more now about the usefulness of a pay stub.
Creating pay stubs will help you discover more about payments, deductions, and contributions. The three main parts of a sample pay stub are gross pay, deductions, taxes, and contributions, and net pay. Gross pay is the amount that an employee has made in a specified duration before any deductions are made. Information regarding the gross pay is usually broken down in two separate columns; current gross pay and year-to-date totals. Read more now on items in the gross pay section.
Since there are mandatory deductions and contributions, not employee takes home the gross pay. In the pay stub, an employee will see all the deductions made from their gross pay. Employee tax deductions, benefits, and employee contributions are some of the things that are taken out of the gross pay. Here, you will learn some of the things that are taken out of an employee’s gross pay. The last piece of information that you get from the pay stub is the net pay. Net pay is the amount that an employee takes home. From this discussion, you understand the items on a pay stub and reasons to create one.