There are a variety of ways how businesses can grow and become successful. You can, however, increase the growth of your business by taking care of your workers. One way to care for your employees is giving them accurate information on their pay. It is, however, possible for complacency to occur from the employer and the employee on pay stubs since almost all workers get paid through direct deposit.
It would be of great benefit to you as the employer, the employees, as well as the business by clearly understanding a pay stub. While this understanding makes the process smoother when an employee leaves, it will also be easier to identify potential mistakes. As a result, you will easily avoid getting into problems with IRS and employees.
But what is a pay stub and what is gross pay? A pay stub will act as proof of payment to a worker. It will also itemize employee’s payment for the particular period and the total for that year to date. Pay stubs will also provide details on deductions from the employee’s earnings like tax. There are also be details of net pay or what the employee takes home. A pay stub could also be paper and electronic depending on the requirements of your state.
The pay stub will also contain information for the employer, as well as the employee. Employees will use pay stubs as records for their wages. Therefore, the employee would use the information in a pay stub to determine correct payment was made, as well as understanding their deductions.
An employer might also need to pay stub for compensation claims, or to secure a loan or a rental contract. When it comes to correcting pay discrepancies, pay stubs would make the process easier. There are, however, certain information that should be contained on the pay stubs.
Among the mandatory information to be contained on a pay stub are such as gross pay, deductions, taxes, contributions, and net pay. The amount paid to an employee before deductions is the gross pay. Gross pay will, however, be calculated differently based on whether the employee receives a yearly salary or paid hourly.
For employees paid on hourly rate, their pay stub will include hours worked. With such information, employees ensure accurate payment for hours worked. The number of hours worked can also appear on pay stub for salaried employees.
In the case of non-exempt workers, the number of hours worked could be different and would include regular hours, double time, and overtime. For clarity and to eliminate confusions, pay stub for non-exempt workers should indicate the number of hours they have worked on separate lines. There are may things you should undetstand about pay stubs such as what is pay rate so visit here.
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