If you run a small business and have to manage your employees accounting but don’t know how to create a pay stub, this post will show you how.
You have probably come across a pay stub, but do you know how to create one?
If you own or run a business, you’ll eventually need to hire employees. Those people want to get paid, and you need to know how to create a pay stub. Don’t worry, it’s easy with modern software once you know what you’re doing!
Keep reading for your quick guide to creating your own pay stubs for your employees.
What is a Pay Stub?
A paycheck isn’t just a check. It includes two parts, the check that the employee gives to a bank, and the stud that the employee keeps as a record.
One part is a piece of paper is deposited at the bank and traded for money. Employment pay stubs contain another part that is a sort of receipt that includes an itemized list of things that are being paid out.
You need to know how to create pay stubs for employees if you want to run a business. A financial advisor or a lawyer can help. There are some standard items on all pay stubs, gross wages, pay, taxes and with holdings.
“Gross” means the number before deductions are taken out. It’s the amount of money the employer is paying out of his pocket total before any deductions or taxes are taken out.
If the employee is an hourly worker, the pay stub should include the total number of hours worked. Break down into the types of work performed, and if the work is overtime or regular wages. There is no independent contractor pay stub, just use the appropriate tax forms.
The pay rate should be shown on the pay stub. Hourly workers should be shown the amount they are paid per hour. Salaried employees should be shown the amount due during the entire pay period.
Taxes, deductions, and Contributions
In the United States and many other countries, salaried employees get a rebate at the end of the year by the IRS [or whatever tax authority]. That’s because the employer must “deduct” the government’s take, and list it on the paystub. The money gets taken in advance before it’s paid to the employee.
Send this money to the IRS, and applied to the taxes due to the employee. Be sure you contact the proper tax authorities, and actually pay those taxes. Deducting an employee’s taxes and not actually paying them is about the fastest way to end your business there is, don’t do it!
How to Create a Pay Stub With Software
All modern accounting software either has a paystub generator included with it, or it has a plugin that can do it. It’s very easy to find a check stub maker template online for a pay stub. You can create a pay stub either using software or by using a template on the web.
You should definitely find a pre-maid solution instead of trying to create your own with a spreadsheet. A professional solution has already researched how to make pay stubs. Theirs will not only look better but will also prevent you from making a mistake.
It’s An Incredible Planet
Running a business can be hard, but it gets a lot easier when you know what you’re doing. You don’t have to know how to create a pay stub from scratch, just find the right software solution that outputs the right template. Then get back to doing what you do best: running your business!