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If you’re a business owner with employees, you need to issue pay stubs.
The best way to do this nowadays is with check stubs software. With this easy-to-use tool, you can quickly create templates and punch in the numbers for each employee. Not only does it save you time and money, but your employees will appreciate having informative pay stubs.
Today, we’re going to show you how to make the most of your check stubs software by telling you the most important things that you need to include on a pay stub. Reading a pay stub can be confusing, but if you’ve got good software, it’ll only take a few minutes out of your day.
How to Use Check Stubs Software Properly
When you get a good check stub creator, the work is all done for you. As long as you understand what’s going on the pay stub, you can easily create as many pay stubs as you need with the same template for all employees.
To give you a hand, we’ll quickly go over some of the most important things that you’ll see on a typical pay stub. The more you know, the better you’ll be able to use your check stubs software.
At the top of a normal pay stub is where you’ll see the employee and employer information. Use your company info as the header and beneath that, include the employee’s full name, an employee ID (when applicable), their SSN, the period for which the payment is for, and the date that the payment is issued.
Underneath the employee information, you’ll include a section to denote the employee’s income, prior to deductions.
Depending on whether you’re dealing with an employee on an hourly wage or a salaried employee, you’ll put their hourly wage and the number of hours worked for the pay period in separate columns. To get their gross earnings, you simply multiply the two numbers together, but your program will likely complete calculations for you.
If it’s a salaried employee, this number will be the same every time. If there are any overtime wages, then display that underneath with the OT wage and add it to the gross income.
All employees are subject to taxes and other withholdings for each paycheck. The amount that’s taken off for federal and state taxes will depend on which tax bracket the employee is in and which state you’re in.
There are also mandatory deductions for medicare and social security, which goes into medical services for those over 65 and various federal social security programs. There could also be deductions for 401k benefits, health insurance, and life insurance, among other things.
At the bottom of the pay stub, you’ll see the employee’s net pay. This is simply the gross pay with the deductions subtracted from it. You’ll usually see year-to-date information alongside it displaying cumulative gross earnings, deductions, and net earnings for the entire year.
Software Makes Your Life Easier
As you can see, making the most of your check stubs software gives you some insight into where the money is going. It’s a great way to make your employees happy while simultaneously making your life much easier.
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