Paystubs are the backbone of the employer-employee relationship. In essence, they are a receipt that displays all of the employee’s pertinent income information. They are a crucial record for both the employer and the employee.
During audits, tax season, or restructuring, being able to use paystubs as a reference becomes all the more important. Learning how to make a paystub is an essential duty for any employer.
Large corporations usually handle paystubs through their payroll department. A small business owner or entrepreneur, on the other hand, must improvise the process and figure out how to make a pay stub on their own.
This guide will tell you all you need to know when it comes to making a paystub. That way, you can focus on other aspects of your business.
What Information Should Be on a Pay Stub?
A paystub may seem like a pretty mundane document, but creating a proper one means incorporating a whole bunch of important and sensitive information. The following pieces of information should be written on even a basic paystub.
Names and Dates
The names of the employee, employer, and the dates of employment should be visible and prominent on a paystub. This is the meat and potatoes of the paystub and possesses the most weight in the record-keeping process.
If the employee is paid hourly, it is a good idea to include their hourly rate somewhere on the paystub. If they are salaried, you can simply include a gross salary. Make sure to include any overtime or bonuses in a separate section.
Make sure to include all earnings paid into state, local, or federal taxes. You should treat each separate tax entity as a line item when creating the document. You can also include a total tax deduction summation at the bottom.
Other Net Pay Influencers
This can include things such as deductions for employee health care, garnishments, back pay, insurance/benefits deductions, or any other influencers of the final “net pay” figure.
This is the total wages that an employee has earned after all of the tax and ancillary deductions. In layman’s terms, it is the amount of money that an employee takes home and puts in their bank account after working.
How to Make a Paystub
There are a variety of ways to make a paystub. In the past paystubs were generated via analog means, such as a pen and paper or typewriter. In the modern age, paystubs are obviously created via a computer.
Your company may have access to internal bookkeeping programs that they want you to use. Some businesses may have their own specific paystub applications as well.
Another option is to use an online paycheck stub template. This is an excellent option for businesses of all sizes that want to generate their own paystubs with ease.
An Important Record
Paystubs will continue to play an important part in the business world. Learning how to make a paystub is an integral part of running a business. Without them, there would be no concrete records of an employee-employer interaction.
As long as people continue to work for wages, those wages will need to be recorded on a paystub. While the methods of production have changed over time, the information inherent to a paystub has not.
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