Proof in all cases makes people live in safer side. Especially in cases of a financial matter, proofs are must and matters a lot in all the times. A pay stub clears all the financial details. It is a document that relates to an employee’s paycheck.
A single sheet of paper containing all financial details about the employee’s salary, taxes, and other contributions is useful. This can be possible using a check stub generator. Make use of excel or online websites to generate pay stubs.
- To answer why the pay stubs are important, check out below points:
- It serves as the proof of earning
- It shows the contribution of the person towards takes and other deductions
- It can be used as proof of money such as when renting a house, applying for a mortgage or requesting credit pay
- It settles the dispute between an employer and an employee because it serves as a record of all payments and withholdings
- It meets all the requirements
- Make your gross pay details appear on a single sheet
- To make a pay stub, one can make use of Excel or any other spreadsheet program
- Create columns for gross pay, deduction and net pay. Make use of template if available
- To calculate gross pay for salaried employees, simply divide their annual salary by the number of paydays per year. For hourly workers, multiple hours worked by the hourly rate of pay.
- If the employee has any overtime, multiply the hourly rate by the number of extra hours worked
- Don’t forget to add in any bounces or commission
- The end result is the net pay that’s used for rest of calculations
- Keep the below points considered while deducting
- While preparing pay stub, deduct the federal taxes.
- Check with the local authority to see if the area charges local taxes
- To calculate FICA tax withholdings, multiply the employer’s gross pay by 6.2% for social security and 1.25% for Medicare.
- If the person sponsors any life insurance the premiums may be deducted before tax, making the gross taxable income less
- If wage garnishment from the employee salary has to be deducted, then deduct this after taxation.
- The outcome will be as the following
- The amount that remains after all the deduction and additions to employee’s gross salary is the amount that will appear on their payback
- If the person pays himself a salary out of a company account, he/she needs to calculate pay stub in the same fashion as for employees. If they don’t, then they need to calculate how much they have earned by looking at income versus expenses in the bank account.
One can also opt for online websites for generating pay stubs as the work as check pay generators. Get into pay stub generator website, enter your state, marital status, salary details, taxes imposed and get the pay stub automatically generated.
Make use of pay stubs and maintain a proof for income and outgoing expenditures.