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 part of a paycheck that provides details regarding 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. In many states, a pay stub is a must-have payment document for all the employees. A pay stub helps employers make tax payments and get 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. Employees view a pay stub as a record of their earnings and contributions. Employees review their pay stubs to establish if there are any errors made and understand all the deductions. In the case of an employer, it is a vital source of information for resolving issues with employees. If an employee raises concern about his or her pay, an employer can easily resolve the issue by looking at the paystub. Additionally, a pay stub can be used by employers to fill out each employee’s Form W-2 when filing taxes. In the homepage of this site, you will read more now about the usefulness of a pay stub.
A pay stub acts as proof of payments and deductions. 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 should receive before deductions, taxes, and contributions are taken out. Year-to-date totals and current gross pay are the two columns of the gross pay section of a pay stub. Read more now on items in the gross pay section.
No employee takes home the gross pay as there are deductions and taxes that are taken out. The second part of the pay stub provides information regarding all the deductions and contributions. Some of the common deductions that are made from every employee’s gross pay are employee tax deductions, benefits, and employee contributions towards health insurance and retirement planning. In this site, you will learn more about taxes, contributions, and deductions on a sample pay stub. The final section of the pay stub is the net pay. It is the figure that remains after all the deductions and contributions are taken out of the gross pay. From this discussion, you understand the items on a pay stub and reasons to create one.