Employees in Egypt and Mesopotamia used to be paid in beer and other commodities. As good as that sounds, you can’t live without an income. Pay stubs were then created for employees to understand and keep track of their earnings to ensure they are not being stubbed by their employers.
Understanding the pay stub definition is important for employers and employees. Find out what a good pay stub definition is and the importance of a blank pay stubs template here!
Pay Stub Definition
Simply put, the pay stub definition is the part of the paycheck that shows details about an employee’s pay.
The wages earned for the pay period and year to date payroll are itemized. Employment pay stubs also show taxes and other paystub deductions that are taken out of an employee’s earnings. The net pay is also listed on a pay stub that shows the amount an employee receives.
Employees can get an electronic pay stub, aka an e stub, or a printed one. Some states are required to provide pay stubs. The information on a pay stub changes depending on which state you work in.
Keeping copies of each pay stub is important for your payroll records.
What are Pay Stubs Used For?
Whether you use an electronic pay stub or a printed one, they include information for not only the employees but for the employers. Pay stubs are used as records of an employee’s wages. Review of pay stubs allows the employees to make sure they were paid the correct amount for the hours they work, and understand the paystub deductions.
Employers could use pay stubs to settle discrepancies that concern the pay of an employee. Questions about an employee’s pay can be solved by looking at the payroll pay stub. Keeping your e stubs and printed stubs can be useful for filling out W-2 forms each year.
Information Included in a Pay Stub
Electronic pay stubs and printed pay stubs have many details that help keep track of payments and deductions. Understanding the pay stub definition is important when looking at the three parts to a pay stub. The three parts to a pay stub are gross wages, taxes, deductions, and contributions, and net pay.
Gross wages are the starting point of pay for your employee’s. Gross wages are the money owed before paystub deductions are taken out.
The way gross pay is calculated is based on if the employee is hourly or on salary. Gross pay is separated into the pay for the current period and total pay for the year.
Gross pay can also include additional income that is earned from overtime, sick pay, holiday pay, bonuses, personal time, and advances.
Taxes, Deductions, and Contributions
Payroll taxes and pay stub deductions reduce an employee’s earnings, therefore employees do not receive their whole gross pay. A pay stub will show an itemized list of deductions so that employees can see how much is taken from the gross pay.
Taxes and deductions are separated into two categories. The first category shows the deductions for that pay period and the second category shows the yearly amount of deductions. Common paystub deductions include employee tax, benefits, and employer contributions.
The pay stub definition of net pay is that the amount of money left over after the deductions have been taken out of the gross pay. This is the amount of money the employee will take home.
Pay stubs will record net pay of the current pay period and for the yearly amount made.
E stubs and printed stubs can easily be checked for accuracy since the earnings and deductions are itemized.
The Importance of Blank Templates
A blank pay stubs template is important for employers because making pay stubs can help keep track of everything.
Stub makers can generate multiple professional and realistic paystub samples. Businesses can benefit from this because the tool allows them to have proof of income and payroll services for their employees.
Pay stubs are not mandated by federal law, but it is recommended that businesses provide their employees with a pay stub, whether it is an electronic pay stub or a printed one. Employment pay stubs should accompany checks every month or week.
Workers may need proof of income for certain reasons like renting a house or apartment, applying for finance or a mortgage, requesting credit, etc. They also provide proof of paying taxes which is required.
To make an employment pay stub, you must calculate your employee’s gross pay, calculate deductions, and figure out the net pay based on the deductions.
Companies can enjoy huge savings by generating pay stubs. A generator often has a one time only fee which is cheaper than adding an employee to work through all the math. This reduced the money you would spend hiring a staff member, printing papers, etc.
Get Started on Your Pay Stubs Now!
Now that you are aware of the pay stub definition and why having them is important for business, you can get started on creating yours with blank templates.
The information that is detailed on an employment pay stub may seem complex, but it is easy to understand all of the parts with a little research. Don’t forget how important it is to give pay stubs to your employees and keep everything for your records.
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