Everyone must be aware of what a paycheck is; it is something that every employee waits for at the end of every month.
What is a pay stub then? To begin with, it is not a paycheck, but it’s definitely related to it. A pay stub is a document that makes the life of every employer easier as it helps every employee understand how their paycheck is broken down.
The question you may be asking yourself is why it can be important and beneficial for the employer, the employee, and the business. If you want to learn more about what it is and why it saves so much time and effort for business owners and managers, this article will answer your questions. Read on and find out all you need to know about a pay stub.
What’s on a Pay Stub Document?
As we previously mentioned, a pay stub is a document that keeps track of everything about each employee and shows how the paycheck is broken down. Unlike the paycheck, both the overall and net salaries are mentioned in that document. In addition to that, everything deducted from the employee’s salary is mentioned in detail, so, this document has the overall salary, each tax deducted and the amount of money deducted for it, any money the employee spends for insurance whether it’s medical or life insurance, and if the employee has a retirement plan they pay for.
The document also includes the pay rate, the date of employment, and the date the said worker gets paid on. It has the employee’s information; full name, address, social security number, position, and whether they get paid weekly, hourly, or monthly. In addition to this, it also must include the employer’s name and address.
How to Create a Pay Stub
Creating a pay stub manually can be quite hectic, as well as time and effort consuming;there is always a possibility of human error as well and that can lead to unnecessary issues and disputes. Thanks to today’s technological advancements, this process can be done in no more than a couple of minutes online. The internet now makes it super easy for any employer to have an online paystubs maker that does the job in no time. All that needs to be done is for the employer to add the information required and the maker puts everything in the right place. These online pay stub makers are widely available and employers can choose the one they think would suit their needs most.
How Practical It Is for Your Business
For starters, employers need to keep track of the payroll to understand how much has been paid to each employee. It also helps in keeping track of tax and insurance payments, and can be used as a valid documentation proof to resolve any tax disputes. It is also a great help when companies send tax documents required by governments since all the information and their breakdown shows how taxes are being paid and when they are paid.
The employee can understand what is being deducted from their salaries and why they get the net salary they do. They may also need a copy to submit to the bank, in case they need any type of loans; whether to buy a car or a house, or a personal loan.
For every business owner, having information about payments clearly stated in detail is the best way to manage a business and different payments. It also maintains transparency between everyone working at any organization, which in turn builds trust between business owners and their employees. A pay stub helps employees feel satisfied, learning everything they need to know about their salary and understanding why certain deductions happen, and how much these deductions cost.