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What is a Pay Stub and What is Included in It?
A pay stab is a paycheck section that displays information about the employee’s pay. It itemizes the salaries earned during a pay period and the year-to-date payment. 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 provide pay stubs. The info included in the pay stubs differs from state to state. It is advisable that you retain a copy of each payroll stub for use in your payroll records.
What is the Use of Pay Stubs
A pay stub contains information that applies to both the employer and the employee. The employees are offered with the pay stubs as a record of their wages. The workers can review the pay stubs to assess whether they were paid correctly and also to help them understand their deductions.
The employer can use the pay stub to settle discrepancies with employee day. If an issue comes up about the worker’s pay; you can use the payroll pay stub to fix the problem. When it comes to filing of taxes; you can refer to the pay stubs to fill out each employee’s Form W-2.
What is Included in the Pay Stubs
There is a lot of information included in the pay stub to help both the employer and employee keep track of 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. Gross wages is the money that the worker is owed without the deductions being made. The gross pay is calculated differently depending on whether one is paid a salary or hourly. For the hourly workers, the hourly rate is multiplied by the number of hours’s worked. To get the salaried employee’s gross pay, divide the annual salary by the number of pay periods in the year.
Taxes, Deductions, and Contributions: Normally, the employees do not take the gross salary during the payment period. Payroll taxes and other deductions are made thus reducing their earnings. The pay stub will list down the deductions allowing the employee to see the amounts that have been taken from their gross pay. Deductions include the employee tax deductions, benefits and other deductions, as well as employer contributions.
Net Pay: The net pay is the amount left over after the deductions have been subtracted from the gross pay. This is the amount that the worker will take back home. It is the amount that the employer indicates on the employee’s paycheck or direct deposit into their bank account.
Normally, the pay stub record the net pay thus you can find both the current net pay for the pay period and the year-to-date net pay.