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Understanding a Pay Stub and its Contents

A pay stab is a paycheck section that displays information about the employee’s pay. It lists the wages earned for that particular pay period and year-to-date payroll. It also indicates the taxes and other deductions made from the wages of an employee. 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 give the workers the pay stub. The information that is added on the pay stub will vary depending on the state. It is good to keep a copy of each payroll stub for your payroll records.

The Work of Payroll Stubs
The information that is included in a pay stub is useful to both the employer and the employee. The employees receive the pay stubs as records of their payments. Employees can review their pay stubs to ensure that they were paid the correct amount and understand their deductions.
The employer can use the pay stub to settle discrepancies with employee day. If an employee raises an issue about their pay, you may need to solve it by looking at the pay stub. The pay stubs are also useful when filing taxes as you can apply to them to fill the employee’s Form W-2.

Components of the Pay Stub
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 are the starting point of a worker’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 based on whether the employee is paid a salary or hourly. When calculating the hourly pays, the hourly rate is multiplied by the number of hours worked. When it comes to the salaried workers the annual salary is divided by the number of payment periods in the year.

On the payment day, workers will not take home the gross salary. Payroll taxes and other deductions are made thus reducing their earnings. Deductions are listed on the pay stub to enable the employee to see the amounts 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 after removing the deductions from the gross salary. This is the amount that the worker will take back home. It is the money that the employer will indicate on the worker’s paycheck or deposit into their bank account.

The pay stubs records net pay hence you can find both the current net pay for the pay period and the year-to-date net pay.

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