There are a variety of ways how businesses can grow and become successful. 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.
The business, employer, and employees would all benefit when they good understanding of a pay stub. Understanding a pay stub will make it easier to detect mistakes, as well as simplify the process if an employee has left. As a result, you will easily avoid getting into problems with IRS and employees.
But 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. A pay stub could also be paper and electronic depending on the requirements of your state.
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. A worker would, therefore, evaluate the information in the pay stubs to understand their deduction and find out if correct payment was made.
For the employer, a pay stub would be helpful when securing a loan or for a compensation claim. When an employer has a good pay stub record, it becomes easier when it comes to resolving pay discrepancies. There are, however, certain information that should be contained on the pay stubs.
Some of the mandatory information on a pay stub include gross pay, net pay, taxes, deductions, as well as contributions. Gross pay is what is paid to the employee before deductions were made. However, gross pay is calculated differently depending on whether an employee is paid hourly or yearly salary.
In case an employee is paid hourly, the pay stub will have hour worked. With such information, employees ensure accurate payment for hours worked. The number of hours worked can also appear on pay stub for salaried employees.
For a non-exempt worker, their working hours may be different which can include regular hours, overtime, as well as double time. For clarity and to eliminate confusions, pay stub for non-exempt workers should indicate the number of hours they have worked on separate lines.