A paystub is something that is given to employees along with their paychecks and is similar to receiving payslips. It details the amount of money that has been paid for a particular period of service and contains valuable information regarding gross payment received and relevant tax deductions, along with any additional deductions that may have taken place during that time period.
Distinct and Necessary Elements of a Paystub
Each paystub is made up of a few basic and necessary elements, commonly found on all paystubs that are processed through a payroll processing service.
Typically, each paystub comes with the following elements:
General Information – a paystub should contain an employee’s basic identifying information, such as the name and address of the employer, the name and address of the employee, and the employee’s social security number, all inputted by a paystub generator.
Gross Wages – noted as pre-tax earnings; this is the amount earned for the pay period advertised and is generated with the check stub maker. This section should denote information such as total hours worked, rate of pay, accrued time off, and any additional earnings processed through payroll.
Pay Period – processed through payroll software; this information details and defines the days that payments are attributed to an employee, along with listing the total hours worked, both cumulative and for the stated period.
Tax Deductions – Federal tax withholding, state tax withholding, Social Security tax, Medicare withholdings, and unemployment taxes should all have their own identifying line on a pay stub. All these deductions are noted and added when you make paystubs, either weekly, bi-weekly, or monthly.
Voluntary Deductions – a voluntary decision is one that is chosen and implemented by the employee. This pay stub line item lists information regarding an amount(s) that an employee chooses to withhold during each payroll run and can include items like a regular donation or additional benefit deduction.
Involuntary Deductions – these types of deductions are those that are garnishments off of one’s wages or salary and can be included by a pay stub creator for things like taxes owed or a court order of some kind—the court-ordered child support, for example.
Net Pay – this is the final amount of money that the employee takes home with them at the end of the day. Gross pay received minus all the relevant deductions that have been made will indicate the pocketed amount taken home.
Check out this post for some great examples of how to create paystubs and paystub maker software that can work for you. Creating a pay stub is, although not essential, a highly effective way to ensure that all the relevant and essential information is wrapped together in a neat and concise little package.
Closing Off
To generate a pay stub is, using the right payroll software, a pleasure, and is something that makes managing one’s personal finances and budgeting a whole lot easier. Especially when trying to acquire a loan or some other form of personal finance. So create a paystub with a professional paystub creator and afford employees the transparency and completeness that they deserve. Read More – 6 Rules of Growth Investing
A paystub is something that is given to employees along with their paychecks and is similar to receiving payslips. Photo Credit – Pexels
