The importance of pay stubs can never be underestimated in the world today especially in instances where employees have to file for the attacks or in situations where the employee has a need and want to apply for mortgage. As an employer, it is important for you to understand that you are supposed to be making pay stubs for your employees. Although the federal law does not dictate that pay stubs be made and presented, there are a number of states that require that pay stubs be presented within 24 hours of the employees pay date. Some employers find it very hard for them to come up with quality pay stubs for their employees and one of the reasons why this is so, is that they do not have the knowledge on how to go about it. Making pay stubs for your employees can be quite easy and following the guidelines that have been highlighted underneath you will be able to make good ones.
The first thing you need to do as an employer is try and calculate the gross income of each of your employees. The best way to achieve this is by finding out the number of hours an employee has worked and then you multiply it by your rate of pay in which in your case is the standard rate of pay. Overtime hours is another important thing you need to consider. Determining the multiply for overtime work is quite easy in the process involves taking the number of overtime hours multiplied by 1.5. The gross income of your employee will be the sum of two multiplications you’ve done.
The next step should be calculating the deductions to be made on the gross income of employees. It is important to understand that each employee has a different withholding rate and they are obligated to pay tax hence, you should ensure that you deduct tax in accordance to employees withholding rate. It is important to note that the law requires that all employers match social security and Medicare deductions and therefore you should ensure that you make these deductions on your employer’s gross income. Obtaining the employee’s deductible amount for Social Security is very easy because all you need to do is take 0.062 and multiply it by the employee’s gross income and then take 0.0145 and multiply it by employee’s gross income to obtain the deductible amount for Medicare. The amount that remains after the deductions is what is known as the net income of employees. Click here for more Some of the things that are required when making pay stubs for your employees is the name of that particular employee, Social Security number as well as the name of your company.