What does a pay stub look like? If you're in charge of paying employees, you can't be asking yourself that. You need to understand what pay stubs look like and how they work. Trying to fill them out without knowing what information is required can result in errors that will take more time to solve in the future. So, let's break it down!
What's A Pay Stub?
A pay stub is not the same thing as a paycheck, but in most cases, it is given to an employee with their paycheck. It includes important information about an employee's payment, like wages earned for the pay period, necessary deductions, and the amount of money the employee gets to take home.
This exact information can change depending on what state you live in, but many states require you to give pay stubs to your employees. You should keep a copy of each pay stub for your own payroll records.
Why Are Pay Stubs Important?
Both employers and employees can use pay stubs as a way to keep a record of past wages, but they can also be used to make sure payments are accurate. By seeing how their payment is broken down, employees can understand tax deductions and know how much of their wages is going where.
Should there ever be a discrepancy between you and your employees, you can use pay stubs to prove they were paid fairly. Employees can also use pay stubs to help them fill out their W-2 Form when it's time to complete taxes.
What Does A Pay Stub Look Like?
Because the exact information on a pay stub depends on the state, pay stubs tend to look different for each employer. They can be sent to employees in the mail or electronically, so the delivery method may change how they look as well. But every pay stub should have the same basic information:
- Company name
- Employees name
- Employer's address
- Employer's number
- The last four digits of the employer's social security number
- Start date and end date of the pay period
- Gross earnings
- Net earnings
- Complete amount of gross salary, net salary, and deductions to date
Most of those things are pretty self-explanatory, but we'll take a closer look at the three most important parts: gross earnings, deductions, and net earnings.
An employee's gross earnings are the total amount of wages they've earned for the pay period before any deductions are taken out. This section should also include things like hours worked and pay rate.
Hours worked: the pay stub should document how many hours an employee worked during the pay period. If the employee worked different types of hours (regular work hours, overtime work hours, double-time work hours, etc.), each should be listed on its own line.
Pay rate: hourly employees should have their hourly pay rate listed. Salary workers should have the total amount of wages that are due, listed. Any overtime or double-time payment should be added as well.
Things that are taken out of an employee's gross earnings, like tax and benefits, are called deductions. The taxes might include FICA tax, state income tax, local income tax, and federal income tax. Each different kind of tax should be listed on its own line and show the amount taken out. Benefits depend on the company, but they could include retirement plans, health insurance, or payments toward loans.
These should also be given their own lines and show the exact amount taken for each benefit.
This is the money an employee gets to take home with them after deductions have been made. This is the amount you'll write on an actual paycheck.
Make Your Own Pay Stubs
Be done asking yourself "What does a pay stub look like?" Do you need help making your pay stubs? We can guide you through the process so you don't send your employee's inaccurate information. Take a look at our pay stub creator and get started today!