The employee salary and its documentation are the most important element for a business, the employer as well as the employees. While for an employer, it is a way to account for the expenses and cash flow, for the employee it is a proof of employment, the income, and an important document to avail other benefits. Since it is the matter of money, it is essential that the paycheck is justified and understood to both the employee and the employer.
Understanding the paycheck and the pay stub
There are 2 major documents linked to every pay cycle – the paycheck and the pay stub. While the paycheck usually contains the basic information like the payer and payee names, the amount and other little details, the paystub offers a detailed record of various deductions, taxes and other relevant information.
A paystub itemizes the pay into various categories like the pay period, payable days, rates, tax and other deductions, additional benefits and finally the salary that is drawn.
Tips for designing a paystub
For an employer, it is advantages to generate a paystub, as it helps rectify payroll errors and also helps to stay free of any confusions or disputes with employees. Now, there are a number of ways to generate a paystub, it can be manual, electronic or via some reliable pay stub generator software like the Check Stub Maker. Check out these tips to make your task simple
1. Creating a template for reusability
Paystubs aren’t a onetime thing and you would need them for every pay cycle, hence every time making them from scratch isn’t smart. If you are using a software, you can design your own templates or use predefined templates to generate the paystubs. Just make sure that it contains all the necessary information and appropriately lists the components as per regulations and your company needs.
2. Important elements of the paystub
Irrespective of your region of operation, nature of business or type of employment, some information is common and necessary. The paystub must have the following items
- Employee details – Your paystub must contain all essential employee information like the name, designation, deposit details, social security number, pay frequency and type and pay period.
- Base pay (gross salary) – Based on the pay frequency, you should mention the total drawable amount for the cycle
- Tax and other deduction – Every state has its own rates and kinds of deduction, but you should ensure that you list the ones that are applicable to you.
- Hours/ days worked – Depending upon your salary rates and terms of employment, you should mention the number of days or hours served by the employee. This enables both parties to reconcile the drawable amount for the cycle.
Keeping them handy
In the era of digitalization, you can find a variety of software that can help manage these for you – from generation to keeping a backup. Also, it is useful to know that you should retain a copy these paystubs for at least a financial year for reconciliation and regulatory needs.
If you are a business owner/ employer looking for help with your paystubs or need a legitimate stub generator for your organization, use Check Stub Maker and get your stubs generated in no time.