An employee goes in to work everyday, provide his or her services, then expects compensation equal to the amount of work that was done. Receiving money is all well and good, but one also expects to know the details of why he or she receives that much.
This is the reason why employers have to hand out pay stubs to their employees. With a pay stub, an employee can get a full and detailed explanation regarding his or her salary. So this article will focus on what a pay stub is, what should be in it, and how you can go about making one.
A pay stub lists all of the details regarding an employee’s pay. It itemizes the wages that an employee has earned for both the pay period and the year-to-date-payroll. The pay stub also shows the employee just how much of taxes and other deductions have been taken out of his or her paycheck.
The pay stub has information that’s useful for both the employees and the employers. Employees who receive the pay stubs can keep them in their records to help them out with their financial management. Not only does it help them in terms of financial management, but it also helps them for when they need to check if they were paid correctly.
With pay stubs, the employers can help settle any discrepancies that an employee may have note on his or her paycheck. So if there’s a question regarding an employee’s pay, managers can help solve these issues by going over the payroll pay stubs.
The following are details that have to be included in the pay stub, depending on one’s personal circumstances:
You also have to know that not every pay stub is going to be the same. Different companies have their own ways of making their pay stubs. So here are those additional items that you have to look out for:
Often times, your employer or the payroll company that your employer hired may just make use of abbreviations when writing your pay stub. The reason for this is because it saves them more time as well as space. By understanding these abbreviations, it’ll help you better understand the information that’s being presented on your pay stub. So here are a couple of examples of these abbreviations:
While pay stubs can help you out, such as helping you verify your proof of income, they aren’t exactly the kind of documents that you need to hold on to for the rest of your life. As a general rule, it’s best that every employee holds on to their pay stubs for at least one year. Because every year, you’re going to need your paycheck stubs for when you have to pay your taxes. These are also really important for when you have to reconcile your W-2 form and your social security contributions. By keeping the pay stubs that you have, you’ll be able to make sure that you’re paying the right amount of taxes. Once you have finished paying off your taxes, your tax returns will serve as an accurate record of just how much money you were able to make within the year.
Whenever you’re ready to get rid of your pay stubs, you should make sure that they’re discarded properly. The reason for this is that if you don’t throw these away with utmost care, then there’s a chance that someone will be able to get hold of your personal information. The best way of discarding your pay stubs is by shredding them so that nobody will ever be able to grab any information it contains.
Technology today can really help you out when it comes to storing your pay stubs. With the help of technology, paycheck stubs can be easily stored without them having to take up any physical space. There are affordable cloud-based storage solutions that allow users to store large amounts of information for a cheap price. This way, you can store a ton of data that won’t take up your computer’s storage or make it run slowly. It also gives you the comfort of knowing that your pay stubs are safe in cloud storage and you can access them at any time you please. With the ability to scan documents and upload them to the web, you can actually hold on to your pay stubs for the rest of your life.
For federal law overview
The Fair Labor Standards Act (FLSA) is what regulates issues such as payroll record keeping for employers. The act doesn’t exactly state that employers are required by law to provide pay stubs to their employees. However, federal law does have strict requirements when it comes to record keeping, so it’s best for employers to know what information must be kept in the event that they are required.
For state law overview
In spite of the fact that state payments aren’t exactly required by federal law, most states have still opted to pass state laws wherein it is required by the employers to provide the employees with regular statements regarding their pay and withholdings. The following information must be placed on these statements:
So make sure that you follow these laws so that you will have no problems. Because if you don’t, then expect a lawsuit for withholding important information from your employees.
As mentioned before, both employers and the employees have something to benefit from using pay stubs. The employee can use it to help them keep track of their financial records while the employer can use it to keep track of their employees and their salaries. So if you would like to know more about pay stubs, we have other articles that can teach you how to create pay stubs, as well as having templates that you can choose from should you decide to make one. Be sure to read up on all the information to help you understand everything that you need to know.